1. Use the info in the following table on labor productivities in France and Germany.
Which country has absolute advantage?
o Cheese: France
o Cars: Germany
What is the relative price of cheese if _ does not trade?
o France: 0.
1. How can globalization and international economic integration be measured?
a. Globalization can be measured using four key factors: trade flows, capital flows,
labor flows, and the similarity of prices in separate markets. Each
2. What are the arguments in favor of international organizations? What are the arguments
against them? Which do you think are stronger?
In favor: International institutions are important to the world economy because they help
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Read the above materials and chapter 2 in the textbook, answer the following questions:
What is special drawing rights at the IMF? What is the amount of special drawing rights
allocated to Greece and what is the equivalen
Economic Effects of the War in Iraq
The conflict in Iraq has had a major effect on the economies of Iraq, the U.S. and the
world. With Iraq having one of the largest resources of oil in the world, war and disorder in the
country is affectin
E430 International Economics
Chapter 6 The Theory of Tariffs and Quotas
Suppose the world price for a good@
by the following equations:
and the domestic demand-and-supply curves are given
Demand: P = 60 - 2Q
Supply: P = 6 + 4Q
Chapter 6 Theory of Tariffs and
Introduce the theory of tariffs
Discuss the welfare and efficiency effects of
Analyze the distinction between tariffs and
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Introduction: Tariffs and Quotas
This chapter and the ne
5. Suppose that there are three factors: K, L, and land. Bread requires inputs of land and L, and steel requires K
Which factors are variable/specific?
o Variable: Labor
o Specific: Land and Capital
Suppose that Canada s endowments
Homework 6 (1, 3, 4, 8)
1. What is intraindustry trade, how is it measured, and how does it differ from interindustry
trade? Are the gains from trade similar?
Intraindustry trade is when 2 countries trade the same item. They are each impor