克鲁格曼 教材《国际经济学》(国际金融)习题答案要点1.doc 24页

'中华经济学习网www.100jingji.com官方网站：圣才学习网www.100xuexi.comChapter21．Homehas1200unitsoflaboravailable.Itcanproducetwogoods,applesandbananas.Theunitlaborrequirementinappleproductionis3,whileinbananaproductionitis2.a．Graphouttheproductionpossibilitiesfrontier:b．Whatistheopportunitycostofapplesintermsofbananas?c．Intheabsenceoftrade,whatwouldthepriceofapplesintermsofbananasbe?Intheabsenceoftrade,sincelaboristheonlyfactorofproductionandsupplydecisionsaredeterminedbytheattemptsofindividualstomaximizetheirearningsinacompetitiveeconomy,onlywhenwillbothgoodsbeproduced.So2．Homeisasdescribedinproblem1.Thereisnowalsoanothercountry,Foreign,withalaborforceof800.Foreign’sunitlaborrequirementinappleproductionis5,whileinbananaproductionitis1.a．GraphForeign’sproductionpossibilitiesfrontier:b．Constructtheworldrelativesupplycurve.中华经济学习网www.100jingji.com官方网站：圣才学习网www.100xuexi.com 中华经济学习网www.100jingji.com官方网站：圣才学习网www.100xuexi.com3．Nowsupposeworldrelativedemandtakesthefollowingform:Demandforapples/demandforbananas=priceofbananas/priceofapples.a．Graphtherelativedemandcurvealongwiththerelativesupplycurve:∵Whenthemarketachievesitsequilibrium,wehave∴RDisahyperbolab．Whatistheequilibriumrelativepriceofapples?TheequilibriumrelativepriceofapplesisdeterminedbytheintersectionoftheRDandRScurves.RD:RS:∴中华经济学习网www.100jingji.com官方网站：圣才学习网www.100xuexi.com 中华经济学习网www.100jingji.com官方网站：圣才学习网www.100xuexi.com∴c．Describethepatternoftrade.∵∴Inthistwo-countryworld,Homewillspecializeintheappleproduction,exportapplesandimportbananas.Foreignwillspecializeinthebananaproduction,exportbananasandimportapples.d．ShowthatbothHomeandForeigngainfromtrade.InternationaltradeallowsHomeandForeigntoconsumeanywherewithinthecoloredlines,whichlieoutsidethecountries’productionpossibilityfrontiers.Andtheindirectmethod,specializinginproducingonlyoneproductionthentradewithothercountry,isamoreefficientmethodthandirectproduction.Intheabsenceoftrade,Homecouldgainthreebananasbyforegoingtwoapples,andForeigncouldgainbyoneforegoingfivebananas.Tradeallowseachcountrytotradetwobananasforoneapple.HomecouldthengainfourbananasbyforegoingtwoappleswhileForeigncouldgainoneapplebyforegoingonlytwobananas.SobothHomeandForeigngainfromtrade.4．Supposethatinsteadof1200workers,Homehad2400.Findtheequilibriumrelativeprice.WhatcanyousayabouttheefficiencyofworldproductionandthedivisionofthegainsfromtradebetweenHomeandForeigninthiscase?RD:RS:∴∴中华经济学习网www.100jingji.com官方网站：圣才学习网www.100xuexi.com 中华经济学习网www.100jingji.com官方网站：圣才学习网www.100xuexi.comInthiscase,Foreignwillspecializeinthebananaproduction,exportbananasandimportapples.ButHomewillproducebananasandapplesatthesametime.AndtheopportunitycostofbananasintermsofapplesforHomeremainsthesame.SoHomeneithergainsnorlosesbutForeigngainsfromtrade.5．SupposethatHomehas2400workers,buttheyareonlyhalfasproductioninbothindustriesaswehavebeenassuming,Constructtheworldrelativesupplycurveanddeterminetheequilibriumrelativeprice.Howdothegainsfromtradecomparewiththoseinthecasedescribedinproblem4?Inthiscase,thelaborisdoubledwhiletheproductivityoflaborishalved,sothe＂effectivelabor＂remainsthesame.Sotheanswerissimilartothatin3.AndbothHomeandForeigncangainfromtrade.ButForeigngainslessercomparewiththatinthecase4.6．”Koreanworkersearnonly$2.50anhour;ifweallowKoreatoexportasmuchasitlikestotheUnitedStates,ourworkerswillbeforceddowntothesamelevel.Youcan’timporta$5shirtwithoutimportingthe$2.50wagethatgoeswithit.”Discuss.Infact,relativewagerateisdeterminedbycomparativeproductivityandtherelativedemandforgoods.Korea’slowwagereflectsthefactthatKoreaislessproductivethantheUnitedStatesinmostindustries.Actually,tradewithalessproductive,lowwagecountrycanraisethewelfareandstandardoflivingofcountrieswithhighproductivity,suchasUnitedStates.中华经济学习网www.100jingji.com官方网站：圣才学习网www.100xuexi.com 中华经济学习网www.100jingji.com官方网站：圣才学习网www.100xuexi.comSothispauperlaborargumentiswrong.7．JapaneselaborproductivityisroughlythesameasthatoftheUnitedStatesinthemanufacturingsector(higherinsomeindustries,lowerinothers),whiletheUnitedStates,isstillconsiderablymoreproductiveintheservicesector.Butmostservicesarenon-traded.SomeanalystshavearguedthatthisposesaproblemfortheUnitedStates,becauseourcomparativeadvantageliesinthingswecannotsellonworldmarkets.Whatiswrongwiththisargument?Thecompetitiveadvantageofanyindustrydependsonboththerelativeproductivitiesoftheindustriesandtherelativewagesacrossindustries.Sotherearefouraspectsshouldbetakenintoaccountbeforewereachconclusion:boththeindustriesandservicesectorsofJapanandU.S.,notjustthetwoservicesectors.Sothisstatementdoesnotbadeonthereasonablelogic.8．AnyonewhohasvisitedJapanknowsitisanincrediblyexpensiveplace;althoughJapaneseworkersearnaboutthesameastheirU.S.counterparts,thepurchasingpoweroftheirincomesisaboutone-thirdless.Extendyourdiscussingfromquestion7toexplainthisobservation.(Hint:Thinkaboutwagesandtheimpliedpricesofnon-tradegoods.)TherelativehigherpurchasingpowerofU.S.issustainedandmaintainedbyitsconsiderablyhigherproductivityinservices.Becausemostofthoseservicesarenon-traded,Japanesecouldnotbenefitfromthoselowerservicecosts.AndU.S.doesnothavetofacealowerinternationalpriceofservices.SothepurchasingpowerofJapaneseisjustone-thirdoftheirU.S.counterparts.9．Howdoesthefactthatmanygoodsarenon-tradedaffecttheextentofpossiblegainsfromtrade?Actuallythegainsfromtradedependedontheproportionofnon-tradedgoods.Thegainswillincreaseastheproportionofnon-tradedgoodsdecrease.10．Wehavefocusedonthecaseoftradeinvolvingonlytwocountries.Supposethattherearemanycountriescapableofproducingtwogoods,andthateachcountryhasonlyonefactorofproduction,labor.Whatcouldwesayaboutthepatternofproductionandinthiscase?(Hint:Tryconstructingtheworldrelativesupplycurve.)Anycountriestotheleftoftheintersectionoftherelativedemandandrelativesupplycurvesexportthegoodinwhichtheyhaveacomparativeadvantagerelativetoanycountrytotherightoftheintersection.Iftheintersectionoccursinahorizontalportionthenthecountrywiththatpriceratioproducesbothgoods.中华经济学习网www.100jingji.com官方网站：圣才学习网www.100xuexi.com 中华经济学习网www.100jingji.com官方网站：圣才学习网www.100xuexi.comChapter31.In1986,thepriceofoilonworldmarketsdroppedsharply.SincetheUnitedStatesisanoil-importingcountry,thiswaswidelyregardedasgoodfortheU.S.economy.YetinTexasandLouisiana1986wasayearofeconomicdecline.Why?ItcandeducethatTexasandLouisianaareoil-producingstatesofUnitedStates.Sowhenthepriceofoilonworldmarketsdeclined,therealwageofthisindustryfellintermsofothergoods.Thismightbethereasonofeconomicdeclineinthesetwostatesin1986.2。Aneconomycanproducegood1usinglaborandcapitalandgood2usinglaborandland.Thetotalsupplyoflaboris100units.Giventhesupplyofcapital,theoutputsofthetwogoodsdependsonlaborinputasfollows:Toanalyzetheeconomy’sproductionpossibilityfrontier,considerhowtheoutputmixchangesaslaborisshiftedbetweenthetwosectors.a.Graphtheproductionfunctionsforgood1andgood2.中华经济学习网www.100jingji.com官方网站：圣才学习网www.100xuexi.com 中华经济学习网www.100jingji.com官方网站：圣才学习网www.100xuexi.coma.Graphtheproductionpossibilityfrontier.Whyisitcurved?Q1Q2L1L2PPFThePPFiscurvedduetodecliningmarginalproductoflaborineachgood.Thetotallaborsupplyisfixed.SoasL1rises,MPL1falls;correspondingly,asL2falls,MPL2rises.SoPPgetssteeperaswemovedownittotheright.2.Themarginalproductoflaborcurvescorrespondingtotheproductionfunctionsinproblem2areasfollows:a.Supposethatthepriceofgood2relativetothatofgood1is2.Determinegraphicallythewagerateandtheallocationoflaborbetweenthetwosectors.Withtheassumptionthatlaborisfreelymobilebetweensectors,itwillmovefromthelow-wagesectortothehigh-wagesectoruntilwagesareequalized.Soinequilibrium,thewagerateisequaltothevalueoflabor’smarginalproduct.中华经济学习网www.100jingji.com官方网站：圣才学习网www.100xuexi.com 中华经济学习网www.100jingji.com官方网站：圣才学习网www.100xuexi.comTheabscissaofpointofintersectionillustratedaboveshouldbebetween(20,30).Sinceweonlyhavetofindouttheapproximateanswer,linearfunctioncouldbeemployed.ThelaborallocationbetweenthesectorsisapproximatelyL1=27andL2=73.Thewagerateisapproximately0.98.a.Usingthegraphdrawnforproblem2,determinetheoutputofeachsector.Thenconfirmgraphicallythattheslopoftheproductionpossibilityfrontieratthatpointequalstherelativeprice.Q1Q2L1L2PPFTherelativepriceisP2/P1=2andwehavegottheapproximatelaborallocation,sowecanemploythelinearfunctionagaintocalculatetheapproximateoutputofeachsector:Q1=44andQ2=90.b.Supposethattherelativepriceofgood2fallsto1.Repeat(a)and(b).中华经济学习网www.100jingji.com官方网站：圣才学习网www.100xuexi.com 中华经济学习网www.100jingji.com官方网站：圣才学习网www.100xuexi.comTherelativedeclineinthepriceofgood2causedlabortobereallocated:laborisdrawnoutofproductionofgood2andentersproductionofgood1(Ｌ1=62,L2=38).Thisalsoleadstoanoutputadjustment,thatis,productionofgood2fallsto68unitsandproductionofgood1risesto76units.Andthewagerateisapproximatelyequalto0.74.Q1Q2L1L2PPFa.Calculatetheeffectsofthepricechangeontheincomeofthespecificfactorsinsectors1and2.WiththerelativepricechangefromP2/P1=2toP2/P1=1,thepriceofgood2hasfallenby50percent,whilethepriceofgood1hasstayedthesame.Wageshavefallentoo,butbylessthanthefallinP2(wagesfellapproximately25percent).Thus,therealwagerelativetoP2actuallyriseswhilerealwagerelativetoP1falls.Hence,todeterminethewelfareconsequenceforworkers,theinformationabouttheirconsumptionsharesofgood1andgood2isneeded.2.Inthetextweexaminedtheimpactsofincreasesinthesupplyofcapitalandland.Butwhatifthemobilefactor,labor,increasesinsupply?中华经济学习网www.100jingji.com官方网站：圣才学习网www.100xuexi.com 中华经济学习网www.100jingji.com官方网站：圣才学习网www.100xuexi.coma．Analyzethequalitativeeffectsofanincreaseinthesupplyoflaborinthespecificfactorsmodel,holdingthepriceofbothgoodsconstant.Foraneconomyproducingtwogoods,XanY,withlabordemandsreflectedbytheirmarginalrevenueproductcurves,thereisaninitialwageofw1andaninitiallaborallocationofLx=OxAandLy=OyA.Whenthesupplyoflaborincreases,therightboundaryofthediagramillustratedbelowpushedouttoOy’.ThedemandforlaborinsectorYispulledrightwardwiththeboundary.Thenewintersectionofthelabordemandcurvesshowsthatlaborexpandsinbothsectors,andthereforeoutputofbothXandYalsoexpand.Therelativeexpansionofoutputisambiguous.Wagespaidtoworkersfall.Wb．Graphtheeffectontheequilibriumforthenumericalexampleinproblems2and3,givenarelativepriceof1,whenthelaborforceexpandsfrom100to140.Withthelawofdiminishingreturns,thenewproductionpossibilityfrontierismoreconcaveandsteeper(flatter)attheendswhentotallaborsupplyincreases.L1increaseto90from62andL2increasesto50from38.Wagesdeclinefrom0.74to0.60.ThisnewallocationoflaborleadstoanewoutputmixofapproximatelyQ1=85andQ2=77.中华经济学习网www.100jingji.com官方网站：圣才学习网www.100xuexi.com 中华经济学习网www.100jingji.com官方网站：圣才学习网www.100xuexi.comQ1Q2L1L2PPFChapter41．IntheUnitedStateswherelandischeap,theratiooflandtolaborusedincattlerisingishigherthanthatoflandusedinwheatgrowing.Butinmorecrowdedcountries,wherelandisexpensiveandlaborischeap,itiscommontoraisecowsbyusinglesslandandmorelaborthanAmericansusetogrowwheat.Canwestillsaythatraisingcattleislandintensivecomparedwithfarmingwheat?Whyorwhynot?Thedefinitionofcattlegrowingaslandintensivedependsontheratiooflandtolaborusedinproduction,notontheratiooflandorlabortooutput.TheratiooflandtolaborincattleexceedstheratioinwheatintheUnitedStates,implyingcattleislandintensiveintheUnitedStates.Cattleislandintensiveinothercountriestooiftheratiooflandtolaborincattleproductionexceedstheratioinwheatproductioninthatcountry.ThecomparisonbetweenanothercountryandtheUnitedStatesislessrelevantforansweringthequestion.2．Supposethatatcurrentfactorpricesclothisproducedusing20hoursoflaborforeachacreofland,andfoodisproducedusingonly5hoursoflaborperacreofland.a.Supposethattheeconomy’stotalresourcesare600hoursoflaborand60acresofland.Usingadiagramdeterminetheallocationofresources.WecansolvethisalgebraicallysinceL=LC+LF=600andT=TC+TF=60.ThesolutionisLC=400,TC=20,LF=200andTF=40.中华经济学习网www.100jingji.com官方网站：圣才学习网www.100xuexi.com 中华经济学习网www.100jingji.com官方网站：圣才学习网www.100xuexi.comLaborLandClothFooda.Nowsupposethatthelaborsupplyincreasefirstto800,then1000,then1200hours.UsingadiagramlikeFigure4-6,traceoutthechangingallocationofresources.LaborLandClothFood0l8000l10000l1200b.Whatwouldhappenifthelaborsupplyweretoincreaseevenfurther?Atconstantfactorprices,somelaborwouldbeunused,sofactorpriceswouldhavetochange,ortherewouldbeunemployment.3.“Theworld’spoorestcountriescannotfindanythingtoexport.Thereisnoresourcethatisabundant—certainlynotcapitalorland,andinsmallpoornationsnoteven中华经济学习网www.100jingji.com官方网站：圣才学习网www.100xuexi.com 中华经济学习网www.100jingji.com官方网站：圣才学习网www.100xuexi.comlaborisabundant.”Discuss.Thegainsfromtradedependoncomparativeratherthanabsoluteadvantage.Astopoorcountries,whatmattersisnottheabsoluteabundanceoffactors,buttheirrelativeabundance.Poorcountrieshaveanabundanceoflaborrelativetocapitalwhencomparedtomoredevelopedcountries.3.TheU.S.labormovement—whichmostlyrepresentsblue-collarworkersratherthanprofessionalsandhighlyeducatedworkers—hastraditionallyfavoredlimitsonimportsformless-affluentcountries.Isthisashortsightedpolicyofarationaloneinviewoftheinterestsofunionmembers?Howdoestheanswerdependonthemodeloftrade?IntheRicardo’smodel,laborgainsfromtradethroughanincreaseinitspurchasingpower.Thisresultdoesnotsupportlaboruniondemandsforlimitsonimportsfromlessaffluentcountries.IntheImmobileFactorsmodellabormaygainorlosefromtrade.Purchasingpowerintermsofonegoodwillrise,butintermsoftheothergooditwilldecline.TheHeckscher-Ohlinmodeldirectlydiscussesdistributionbyconsideringtheeffectsoftradeontheownersoffactorsofproduction.Inthecontextofthismodel,unskilledU.S.laborlosesfromtradesincethisgrouprepresentstherelativelyscarcefactorsinthiscountry.TheresultsfromtheHeckscher-Ohlinmodelsupportlaboruniondemandsforimportlimits.4.ThereissubstantialinequalityofwagelevelsbetweenregionswithintheUnitedStates.Forexample,wagesofmanufacturingworkersinequivalentjobsareabout20percentlowerintheSoutheastthantheyareintheFarWest.Whichoftheexplanationsoffailureoffactorpriceequalizationmightaccountforthis?HowisthiscasedifferentfromthedivergenceofwagesbetweentheUnitedStatesandMexico(whichisgeographicallyclosertoboththeU.S.SoutheastandtheFarWestthantheSoutheastandFarWestaretoeachother)?Whenweemployfactorpriceequalization,weshouldpayattentiontoitsconditions:bothcountries/regionsproducebothgoods;bothcountrieshavethesametechnologyofproduction,andtheabsenceofbarrierstotrade.InequalityofwagelevelsbetweenregionswithintheUnitedStatesmaycausedbysomeorallofthesereasons.Actually,thebarrierstotradealwaysexistintherealworldduetotransportationcosts.AndthetradebetweenU.S.andMexico,bycontrast,issubjecttolegallimits;togetherwithculturaldifferencesthatinhibittheflowoftechnology,thismayexplainwhythedifferenceinwageratesissomuchlarger.5.ExplainwhytheLeontiefparadoxandthemorerecentBowen,Leamer,andSveikauskasresultsreportedinthetextcontradictthefactor-proportionstheory.Thefactorproportionstheorystatesthatcountriesexportthosegoodswhoseproductionisintensiveinfactorswithwhichtheyareabundantlyendowed.OnewouldexpecttheUnitedStates,whichhasahighcapital/laborratiorelativetotherestoftheworld,toexportcapital-intensivegoodsiftheHeckscher-Ohlintheoryholds.LeontieffoundthattheUnitedStatesexportedlabor-intensivegoods.Bowen,LeamerandSveikauskasfoundthatthecorrelationbetweenfactorendowmentandtradepatternsisweakfortheworldasawhole.Thedatadonotsupportthepredictionsofthetheorythatcountries"exportsandimportsreflecttherelativeendowmentsoffactors.中华经济学习网www.100jingji.com官方网站：圣才学习网www.100xuexi.com 中华经济学习网www.100jingji.com官方网站：圣才学习网www.100xuexi.com3.InthediscussionofempiricalresultsontheHeckscher-Ohlinmodel,wenotedthatrecentworksuggeststhattheefficiencyoffactorsofproductionseemstodifferinternationally.Explainhowthiswouldaffecttheconceptoffactorpriceequalization.Iftheefficiencyofthefactorsofproductiondiffersinternationally,thelessonsoftheHeckscher-Ohlintheorywouldbeappliedto“effectivefactors”whichadjustforthedifferencesintechnologyorworkerskillsorlandquality(forexample).Theadjustedmodelhasbeenfoundtobemoresuccessfulthantheunadjustedmodelatexplainingthepatternoftradebetweencountries.Factor-priceequalizationconceptswouldapplytotheeffectivefactors.Aworkerwithmoreskillsorinacountrywithbettertechnologycouldbeconsideredtobeequaltotwoworkersinanothercountry.Thus,thesinglepersonwouldbetwoeffectiveunitsoflabor.Thus,theonehigh-skilledworkercouldearntwicewhatlowerskilledworkersdoandthepriceofoneeffectiveunitoflaborwouldstillbeequalized.Chapter61.Foreachofthefollowingexamples,explainwhetherthisisacaseofexternalorinternaleconomiesofscale:a.MostmusicalwindinstrumentsintheUnitedStatesareproducedbymorethanadozenfactoriesinElkhart,Indiana.b.AllHondassoldintheUnitedStatesareeitherimportedorproducedinMarysville,Ohio.c.AllairframesforAirbus,Europe’sonlyproduceroflargeaircraft,areassembledinToulouse,France.d.Hartford,ConnecticutistheinsurancecapitalofthenortheasternUnitedStates.Externaleconomiesofscale:Casesaandd.Theproductionsofthesetwoindustriesconcentrateinafewlocationsandsuccessfullyreduceeachindustry"scostsevenwhenthescaleofoperationofindividualfirmsremainssmall.Externaleconomiesneednotleadtoimperfectcompetition.Thebenefitsofgeographicalconcentrationmayincludeagreatervarietyofspecializedservicestosupportindustryoperationsandlargerlabormarketsorthickerinputmarkets.Internaleconomiesofscale:Casesbandc.Bothofthemoccurattheleveloftheindividualfirm.Thelargertheoutputofaproductbyaparticularfirm,theloweritsaveragecosts.Thisleadstoimperfectcompetitionasinpetrochemicals,aircraft,andautos.2.Inperfectcompetition,firmsetpriceequaltomarginalcost.Whyisn’tthispossiblewhenthereareinternaleconomiesofscale?Unlikethecaseofperfectlycompetitivemarkets,undermonopolymarginalrevenueisnotequaltoprice.Theprofitmaximizingoutputlevelofamonopolistoccurswheremarginalrevenueequalsmarginalcost.Marginalrevenueisalwayslessthanpriceunderimperfectlycompetitivemarketsbecausetosellanextraunitofoutputthefirmmustlowerthepriceofallunits,notjustthemarginalone.3.Itisoftenarguedthattheexistenceofincreasingreturnsisasourceofconflictbetweencountries,sinceeachcountryisbetteroffifitcanincreaseitsproductioninthoseindustriescharacterizedbyeconomiesofscale.Evaluatethisviewintermsofboththemonopolisticcompetitionandtheexternaleconomymodels.Bothinternaleconomiesofscale(whichmayleadtomonopolisticcompetition)andexternal中华经济学习网www.100jingji.com官方网站：圣才学习网www.100xuexi.com 中华经济学习网www.100jingji.com官方网站：圣才学习网www.100xuexi.comeconomiesofscalecouldleadtoincreasingreturns.Byconcentratingtheproductionofeachgoodwitheconomiesofscaleinonecountryratherthanspreadingtheproductionoverseveralcountries,theworldeconomywillusethesameamountoflabortoproducemoreoutput.Inthemonopolisticcompetitionmodel,theconcentrationoflaborbenefitsthehostcountry.Thehostcountrycancapturesomemonopolyrents.Buttherestoftheworldmayhurtandhavetofacehigherpricesonitsconsumptiongoods.Intheexternaleconomiescase,suchmonopolisticpricingbehaviorislesslikelysinceimperfectlycompetitivemarketsarelesslikely.2.Supposethetwocountriesweconsideredinthenumericalexampleonpages132-135weretointegratetheirautomobilemarkerwithathirdcountrywithanannualmarketfor3.75millionautomobiles.Findthenumberoffirms,theoutputperfirm,andthepriceperautomobileinthenewintegratedmarketaftertrade.However,sinceyouwillneversee0.8firms,therewillbe15firmsthatenterthemarket,not16firmssincethelastfirmknowsthatitcannotmakepositiveprofits.Therestofthesolutionisstraight-forward.UsingX=S/n,outputperfirmis41,666units.Usingthepriceequation,andthefactthatc=5,000,yieldsanequilibriumpriceof$7,000.3.Evaluatetherelativeimportanceofeconomiesofscaleandcomparativeadvantageincausingthefollowing:a.Mostoftheworld’saluminumissmeltedinNorwayorCanada.b.Halfoftheworld’slargejetaircraftareassembledinSeattle.c.MostsemiconductorsaremanufacturedineithertheUnitedStatesorJapan.d.MostScotchwhiskeycomesfromScotland.e.Muchoftheworld’sbestwinecomesfromFrance.a.Therelativelyfewlocationsforproductionsuggestexternaleconomiesofscaleinproduction.Iftheseoperationsarelarge,theremayalsobelargeinternaleconomiesofscaleinproduction.b.Sinceeconomiesofscalearesignificantinairplaneproduction,ittendstobedonebyasmallnumberof(imperfectlycompetitive)firmsatalimitednumberoflocations.OnesuchlocationisSeattle,whereBoeingproduces.c.Sinceexternaleconomiesofscalearesignificantinsemiconductorproduction,semiconductorindustriestendtobeconcentratedincertaingeographiclocations.If,forsomehistoricalreason,asemiconductorisestablishedinaspecificlocation,theexportofsemiconductorsbythatcountryisduetoeconomiesofscaleandnotcomparativeadvantage.d."True"scotchwhiskeycanonlycomefromScotland.Theproductionofscotchwhiskeyrequiresatechniqueknowntoskilleddistillerswhoareconcentratedintheregion.Also,中华经济学习网www.100jingji.com官方网站：圣才学习网www.100xuexi.com 中华经济学习网www.100jingji.com官方网站：圣才学习网www.100xuexi.comsoilandclimacticconditionsarefavorableforgrainsusedinlocalscotchproduction.Thisreflectscomparativeadvantage.e.Francehasaparticularblendofclimacticconditionsandlandthatisdifficulttoreproduceelsewhere.Thisgeneratesacomparativeadvantageinwineproduction.6.TherearesomeshopsinJapanthatsellJapanesegoodsimportedbackfromtheUnitedStatesatadiscountoverthepriceschargedbyotherJapaneseshops.Howisthispossible?TheJapaneseproducersemploypricediscriminationacrossUnitedStatesandJapanesemarkets,sothatthegoodssoldintheUnitedStatesaremuchcheaperthanthosesoldinJapan.ItmaybeprofitableforotherJapanesetopurchasethesegoodsintheUnitedStates,incuranytariffsandtransportationcosts,andresellthegoodsinJapan.Clearly,thepricedifferentialacrossmarketsmayleadtosuchprofitablechance.7.ConsiderasituationsimilartothatinFigure6-9,inwhichtwocountriesthatcanproduceagoodaresubjecttoforward-fallingsupplycurves.Inthiscase,however,supposethatthetwocountrieshavethesamecosts,sothattheirsupplycurvesareidentical.a.Whatwouldyouexpecttobethepatternofinternationalspecializationandtrade?Whatwoulddeterminewhoproducesthegood?QP,CDACACExternalEconomicsandSpecializationQP,CDACACExternalEconomicsandSpecializationSupposetwocountriesthatcanproduceagoodaresubjecttoforward-fallingsupplycurvesandareidenticalcountrieswithidenticalcurves.Ifonecountrystartsoutasaproducerofagood,i.e.ithasaheadstartevenasamatterofhistoricalaccident,thenallproductionwilloccurinthatparticularcountryanditwillexporttotherestoftheworld.b.Whatarethebenefitsofinternationaltradeinthiscase?Dotheyaccrueonlytothecountrythatgetstheindustry?Consumersinbothcountrieswillpayalowerpriceforthisgoodwhenexternaleconomiesaremaximizedthroughtradeandallproductionislocatedinasinglemarket.Inthepresentexample,nosinglecountryhasanaturalcostadvantageorisworseoffthanitwouldbeunderautarky.8.Itisfairlycommonforanindustrialclustertobreakupandforproductiontomovetolocationswithlowerwageswhenthetechnologyoftheindustryisnolongerrapidlyimproving—whenitisnolongeressentialtohavetheabsolutelymostmodernmachinery,whentheneedforhighlyskilledworkershasdeclined,andwhenbeingatthecuttingedgeofinnovationconveysonlyasmalladvantage.Explainthistendencyofindustrialclusterstobreakupintermsofthetheoryofexternaleconomies.中华经济学习网www.100jingji.com官方网站：圣才学习网www.100xuexi.com 中华经济学习网www.100jingji.com官方网站：圣才学习网www.100xuexi.comExternaleconomiesareimportantforfirmsastechnologychangesrapidlyandasthe“cuttingedge”movesquicklywithfrequentinnovations.Asthisprocessslows,manufacturingbecomesmorenormalandstandardandthereislessadvantagebroughtbyexternaleconomies.Instead,firmslookforlowcostproductionlocations.Sinceexternaleconomiesarenolongerimportant,firmsfindlittleadvantageinbeingclusteredanditislikelythatlow-wagelocationswillbechosen.CHAPTER71.ThemarginalproductoflaborinHomeis10andinForeignis18.WagesarehigherinForeign,soworkersmigratetheretothepointwherethemarginalproductinbothHomeandForeignisequated.Thisoccurswhenthereare7workersineachcountry,andthemarginalproductoflaborineachcountryis14.2.Thereisnoincentivetomigratewhenthereisfactorpriceequalization.Thisoccurswhenbothcountriesproducebothgoodsandwhentherearenobarrierstotrade(theproblemassumestechnologyisthesameinthetwocountries).AtariffbycountryAincreasestherelativepriceoftheprotectedgoodinthatcountryandlowersitsrelativepriceinthecountryB.Iftheprotectedgooduseslaborrelativelyintensively,thedemandforlaborincountryArises,asdoesthereturntolabor,andthereturntolaborinthecountryBfalls.TheseresultsfollowfromtheStolper-Samuelsontheory,whichstatesthatanincreaseinthepriceofagoodraisesthereturntothefactorusedintensivelyintheproductionofthatgoodbymorethanthepriceincrease.TheseinternationalwagedifferentialsinducemigrationfromcountryBtocountryA.3.Theanalysisofintertemporaltradefollowsdirectlytheanalysisoftradeoftwogoods.Substitute"futureconsumption"and"presentconsumption"for"cloth"and"food."Therelevantrelativepriceisthecostoffutureconsumptioncomparedtopresentconsumption,whichistheinverseoftherealinterestrate.Countriesinwhichpresentconsumptionisrelativelycheap(whichhavelowrealinterestrates)will"export"presentconsumption(i.e.lend)tocountriesinwhichpresentconsumptionisrelativelydear(whichhavehighrealinterestrates).Theequilibriumrealinterestrateafterborrowingandlendingoccurliesbetweenthatfoundineachcountrybeforeborrowingandlendingtakeplace.Gainsfromborrowingandlendingareanalogoustogainsfromtrade--thereisgreaterefficiencyintheproductionofgoodsintertemporally.4.Foregoingcurrentconsumptionallowsonetoobtainfutureconsumption.Therewillbeabiastowardsfutureconsumptioniftheamountoffutureconsumptionwhichcanbeobtainedbyforegoingcurrentconsumptionishigh.Intermsoftheanalysispresentedinthischapter,thereisabiastowardsfutureconsumptioniftherealinterestrateintheeconomyishigherintheabsenceofinternationalborrowingorlendingthantheworldrealinterestrate.a.Thelargeinflowsofimmigrantsmeansthatthemarginalproductofcapitalwillriseasmoreworkersenterthecountry.Therealinterestratewillbehigh,andtherewillbeabiastowardsfutureconsumption.b.Themarginalproductofcapitalislowandthusthereisabiastowardscurrentconsumption.c.Thedirectionofthebiasdependsuponthecomparisonoftheincreaseinthepriceofoilandtheworldrealinterestrate.Leavingtheoilinthegroundprovidesareturnoftheincreaseinthepriceofoilwhereastheworldrealinterestratemaybehigherorlowerthanthisincrease.d.Foregoingcurrentconsumptionallowsexploitationofresources,andhigherfutureconsumption.Thus,thereisabiastowardsfutureconsumption.中华经济学习网www.100jingji.com官方网站：圣才学习网www.100xuexi.com 中华经济学习网www.100jingji.com官方网站：圣才学习网www.100xuexi.come.Thereturntocapitalishigherthanintherestoftheworld(sincethecountry"srateofgrowthexceedsthatoftherestoftheworld),andthereisabiastowardfutureconsumption.5.a.$10millionisnotacontrollinginterestinIBM,sothisdoesnotqualifyasdirectforeigninvestment.Itisinternationalportfoliodiversification.b.Thisisdirectforeigninvestmentifoneconsiderstheapartmentbuildingabusinesswhichpaysreturnsintermsofrents.c.UnlessparticularU.S.shareholderswillnothavecontroloverthenewFrenchcompany,thiswillnotbedirectforeigninvestment.d.ThisisnotdirectforeigninvestmentsincetheItaliancompanyisan"employee,"butnottheoneswhichultimatelycontrol,thecompany.6.Intermsoflocation,theKarmacompanyhasavoidedBrazilianimportrestrictions.Intermsofinternalization,thefirmhasretaineditscontroloverthetechnologybynotdivulgingitspatents.chapter81.Theimportdemandequation,MD,isfoundbysubtractingthehomesupplyequationfromthehomedemandequation.ThisresultsinMD=80-40xP.Withouttrade,domesticpricesandquantitiesadjustsuchthatimportdemandiszero.Thus,thepriceintheabsenceoftradeis2.2.a.Foreign"sexportsupplycurve,XS,isXS=-40+40xP.Intheabsenceoftrade,thepriceis1.b.Whentradeoccursexportsupplyisequaltoimportdemand,XS=MD.Thus,usingtheequationsfromproblems1and2a,P=1.50,andthevolumeoftradeis20.3.a.ThenewMDcurveis80-40x(P+t)wheretisthespecifictariffrate,equalto0.5.(Note:insolvingtheseproblemsyoushouldbecarefulaboutwhetheraspecifictarifforadvaloremtariffisimposed.Withanadvaloremtariff,theMDequationwouldbeexpressedasMD=80-40x(1+t)P).Theequationfortheexportsupplycurvebytheforeigncountryisunchanged.Solving,wefindthattheworldpriceis$1.25,andthustheinternalpriceathomeis$1.75.Thevolumeoftradehasbeenreducedto10,andthetotaldemandforwheatathomehasfallento65(fromthefreetradelevelof70).ThetotaldemandforwheatinForeignhasgoneupfrom50to55.b.andc.ThewelfareofthehomecountryisbeststudiedusingthecombinednumericalandgraphicalsolutionspresentedbelowinFigure8-1.中华经济学习网www.100jingji.com官方网站：圣才学习网www.100xuexi.com 中华经济学习网www.100jingji.com官方网站：圣才学习网www.100xuexi.comwheretheareasinthefigureare:a:55(1.75-1.50)-.5(55-50)(1.75-1.50)=13.125b:.5(55-50)(1.75-1.50)=0.625c:(65-55)(1.75-1.50)=2.50d:.5(70-65)(1.75-1.50)=0.625e:(65-55)(1.50-1.25)=2.50Consumersurpluschange:-(a+b+c+d)=-16.875.Producersurpluschange:a=13.125.Governmentrevenuechange:c+e=5.Efficiencylossesb+dareexceededbytermsoftradegaine.[Note:inthecalculationsforthea,b,anddareasafigureof.5showsup.Thisisbecausewearemeasuringtheareaofatriangle,whichisone-halfoftheareaoftherectangledefinedbytheproductofthehorizontalandverticalsides.]4.Usingthesamesolutionmethodologyasinproblem3,whenthehomecountryisverysmallrelativetotheforeigncountry,itseffectsonthetermsoftradeareexpectedtobemuchless.Thesmallcountryismuchmorelikelytobehurtbyitsimpositionofatariff.Indeed,thisintuitionisshowninthisproblem.Thefreetradeequilibriumisnowattheprice$1.09andthetradevolumeisnow$36.40.Withtheimpositionofatariffof0.5byHome,thenewworldpriceis$1.045,theinternalhomepriceis$1.545,homedemandis69.10units,homesupplyis50.90andthevolumeoftradeis18.20.WhenHomeisrelativelysmall,theeffectofatariffonworldpriceissmallerthanwhenHomeisrelativelylarge.WhenForeignandHomewerecloserinsize,atariffof.5byhomeloweredworldpriceby25percent,whereasinthiscasethesametarifflowersworldpricebyabout5percent.TheinternalHomepriceisnowclosertothefreetradepriceplustthanwhenHomewasrelativelylarge.Inthiscase,thegovernmentrevenuesfromthetariffequal9.10,theconsumersurpluslossis33.51,andtheproducersurplusgainis21.089.Thedistortionarylossesassociatedwiththetariff(areasb+d)sumto4.14andthetermsoftradegain(e)is0.819.Clearly,inthissmallcountryexamplethedistortionarylossesfromthetariffswampthetermsoftradegains.Thegenerallessonisthesmallertheeconomy,thelargerthelossesfromatariffsincethetermsoftradegainsaresmaller.5.Theeffectiverateofprotectiontakesintoconsiderationthecostsofimportedintermediategoods.Inthisexample,halfofthecostofanaircraftrepresentscomponentspurchasedfromothercountries.Withoutthesubsidytheaircraftwouldcost$60million.TheEuropeanvalueaddedtotheaircraftis$30million.Thesubsidycutsthecostofthevalueaddedtopurchasersoftheairplaneto$20million.Thus,theeffectiverateofprotectionis(30-20)/20=50%.6.Wefirstusetheforeignexportsupplyanddomesticimportdemandcurvestodeterminethenewworldprice.Theforeignsupplyofexportscurve,withaforeignsubsidyof50percentperunit,becomesXS=-40+40(1+0.5)xP.Theequilibriumworldpriceis1.2andtheinternalforeignpriceis1.8.Thevolumeoftradeis32.Theforeigndemandandsupplycurvesareusedtodeterminethecostsandbenefitsofthesubsidy.Constructadiagramsimilartothatinthetextandcalculatetheareaofthevariouspolygons.Thegovernmentmustprovide(1.8-1.2)x32=19.2unitsofoutputtosupportthesubsidy.Foreignproducerssurplusrisesduetothesubsidybytheamountof15.3unitsofoutput.Foreignconsumerssurplusfallsduetothehigherpriceby7.5unitsofthegood.Thus,thenetlosstoForeignduetothesubsidyis7.5+19.2-15.3=11.4unitsofoutput.Homeconsumersandproducersfaceaninternalpriceof1.2asaresultofthesubsidy.Homeconsumerssurplusrisesby70x.3+.5(6x.3)=21.9whileHomeproducers中华经济学习网www.100jingji.com官方网站：圣才学习网www.100xuexi.com 中华经济学习网www.100jingji.com官方网站：圣才学习网www.100xuexi.comsurplusfallsby44x.3+.5(6x.3)=14.1,foranetgainof7.8unitsofoutput.7.Atapriceof$10perbagofpeanuts,Aciremaimports200bagsofpeanuts.Aquotalimitingtheimportofpeanutsto50bagshasthefollowingeffects:a.Thepriceofpeanutsrisesto$20perbag.b.Thequotarentsare($20-$10)x50=$500.c.Theconsumptiondistortionlossis.5x100bagsx$10perbag=$500.d.Theproductiondistortionlossis.5x50bagsx$10perbag=$250.Chapter91.Theargumentsforfreetradeinthisquoteinclude:Freetradeallowsconsumersandproducerstomakedecisionsbaseduponthemarginalcostandbenefitsassociatedwithagoodwhencostsandpricesareundistortedbygovernmentpolicy.ThePhilippinesis"small,"soitwillhavelittlescopeforinfluencingworldpricesandcapturingwelfaregainsthroughanimprovementofitstermsoftrade."Escapingtheconfinesofanarrowdomesticmarket"allowspossiblegainsthrougheconomiesofscaleinproduction.Freetrade"opensnewhorizonsforentrepreneurship."Specialinterestsmaydictatetradepolicyfortheirownendsratherthanforthegeneralwelfare.Freetradepoliciesmayaidinhaltingcorruptionwherethesespecialinterestsexertundueordisproportionateinfluenceonpublicpolicy.2.a.Thisispotentiallyavalidargumentforatariff,sinceitisbasedonanassumedabilityoftheUnitedStatestoaffectworldprices--thatis,itisaversionoftheoptimaltariffargument.IftheUnitedStatesisconcernedabouthigherworldpricesinthefuture,itcouldusepolicieswhichencouragetheaccumulationofoilinventoriesandminimizethepotentialforfutureadverseshocks.b.SharplyfallingpricesbenefitU.S.consumers,andsincetheseareoff-seasongrapesanddonotcompetewiththesuppliesfromU.S.producers,thedomesticproducersarenothurt.Thereisnoreasontokeepaluxurygoodexpensive.c.Thehigherincomeoffarmersduetoexportsubsidiesandthepotentiallyhigherincometothosewhosellgoodsandservicestothefarmerscomesattheexpenseofconsumersandtaxpayers.Unlessthereissomedomesticmarketfailure,anexportsubsidyalwaysproducesmorecoststhanbenefits.Indeed,ifthegoalofpolicyistostimulatethedemandfortheassociatedgoodsandservices,policiesshouldbetargeteddirectlyatthesegoals.d.Theremaybeexternaleconomiesassociatedwiththedomesticproductionofsemiconductors.Thisisapotentiallyavalidargument.Butthegainstoproducersofprotectingthesemiconductorindustrymustasalwaysbeweighedagainstthehighercoststoconsumersandotherindustrieswhichpervasivelyusethechips.Awell-targetedpolicyinstrumentwouldbeaproductionsubsidy.Thishastheadvantageofdirectlydealingwiththeexternalitiesassociatedwithdomesticchipproduction.e.Thousandsofhomebuyersasconsumers(aswellasworkerswhobuildthehomesforwhichthetimberwasbought)havebenefitedfromthecheaperimportedtimber.Ifthegoalofpolicyistosoftentheblowtotimberworkers,amoreefficientpolicywouldbedirectpaymentstotimberworkersinordertoaidtheirrelocation.中华经济学习网www.100jingji.com官方网站：圣才学习网www.100xuexi.com 中华经济学习网www.100jingji.com官方网站：圣才学习网www.100xuexi.com3.Withouttariffs,thecountryproduces100unitsandconsumes300units,thusimporting200units.a.Atariffof5perunitleadstoproductionof125unitsandconsumptionof250units.Theincreaseinwelfareistheincreaseduetohigherproductionof25x10minusthelossestoconsumerandproducersurplusof(25x5)/2and(50x5)/2,respectively,leadingtoanetgainof62.5.b.Aproductionsubsidyof5leadstoanewsupplycurveofS=50+5x(P+5).Consumptionstaysat300,productionrisesto125,andtheincreaseinwelfareequalsthebenefitsfromgreaterproductionminustheproductiondistortioncosts,25x10-(25x5)/2=187.5.c.Theproductionsubsidyisabettertargetedpolicythantheimporttariffsinceitdirectlyaffectsthedecisionswhichreflectadivergencebetweensocialandprivatecostswhileleavingotherdecisionsunaffected.Thetariffhasadouble-edgedfunctionasbothaproductionsubsidyandaconsumptiontax.d.Thebestpolicyistohaveproducersfullyinternalizetheexternalitybyprovidingasubsidyof10perunit.ThenewsupplycurvewillthenbeS=50+5x(P+10),productionwillbe150units,andthewelfaregainfromthispolicywillbe50x10-(10x50)/2=250.4.Thegovernment"sobjectiveistomaximizeconsumerssurplusplusitsownrevenueplustwicetheamountofproducerssurplus.Atariffof5perunitimprovesproducerssurplusby562.5,worsensconsumerssurplusby1375,andleadstogovernmentrevenueof625.Thetariffresultsinanincreaseinthegovernment"sobjectivefunctionof375.5.TheUnitedStateshasalegitimateinterestinthetradepoliciesofothercountries,justasothercountrieshavealegitimateinterestinU.S.activities.Thereasonisthatuncoordinatedtradepoliciesarelikelytobeinferiortothosebasedonnegotiations.Bynegotiatingwitheachother,governmentsarebetterablebothtoresistpressurefromdomesticinterestgroupsandtoavoidtradewarsofthekindillustratedbythePrisoners"Dilemmaexampleinthetext.6.a.Whiletariffsarelegal,theUnitedStatesisobligedtooffercompensationforanyunilateraltariffincreasebyreducingothertariffstocompensatetheaffectedexportingcountry.b.ExportsubsidiesonagriculturalproductsarelegalunderGATT.c.ThisisnotlegalunderGATTbecausetheUnitedStatesisnotofferingcompensatingreductionsinothertariffsonCanadiangoods.Interestingly,inthelate1980s,U.S.effortstoprotecttheshakesandshinglesindustryweremetwithanoutcryandCanadianthreatsofatradewar.TheseprotectionisteffortsbytheUnitedStateswererescinded.d.ThisislegalunderGATTsincetheactionistakenbyCanadaonitsownexports.e.ThisislegalunderGATTsinceitdoesnotinvolveanydirectexportsubsidies.f.ThisislegalunderGATTand,infact,mayhelpincreasethebenefitsfromtrade.7.ThepotentialeconomiccostsassociatedwiththeentranceofPolandandHungaryintoanexpandedEUdependlargelyonwhethertheirmembershipresultsintradecreationortradediversion.Inparticular,PolandandHungarywillgainiftheyengageinnewtradewithWesternEuropealthoughtheymightloseiftradewithintheEuropeanUnionsimplyreplacestradewhichhadbeenoccurringwithEasternbloccountries.Furthermore,bothofthesenationswillfaceatleasthigherstructuralunemploymentduringthetransitionperiod.Someofthenegativeeffectsonworkersmightbelessenediflabormobilityispermittedacrossborders.TheWesternnationsshouldalsobeconcernedonthetradecreationversustradediversionaspects中华经济学习网www.100jingji.com官方网站：圣才学习网www.100xuexi.com 中华经济学习网www.100jingji.com官方网站：圣才学习网www.100xuexi.comoftheentryofPolandandHungary.Fordistributionalandpoliticalreasons,theymaybeconcernedaboutwhetherthepricesoftheirownproductswillbedrivendownbycompetitionorwhethertheentrantswillsimplybringtotheWesternmarketsanexpandedvarietyofproductsandscopeforadditionalscaleeconomiesofproduction.WorkersinWesternmarketsmaybeconcernedthatinflowsofforeignlabordrivedownwages,although,aswehaveobservedinpreviouschapters,thenominalwageshiftsshouldbeconsideredinlightofchangesinthepricesofconsumptiongoods.CountriesoutsideoftheEU,suchastheUnitedStatesandJapan,wouldexpressconcernifthesuppliesofproductstotheEUbyPolandandHungarysubstituteforgoodspreviouslysuppliedbytheUnitedStatesandJapan.Thelargeoutsiders,however,couldreapsubstantialpositivegainsfromhavingexpandedaccesstotheconsumersofPolandandHungary.Chapter101.TheJapaneseexamplegivespausetothosewhobelievethatprotectionismisalwaysdisastrous.However,thefactofJapanesesuccessdoesnotdemonstratethatprotectionisttradepolicywasresponsibleforthatsuccess.JapanwasanexceptionalsocietythathademergedintotheranksofadvancednationsbeforeWorldWarII,andwasrecoveringfromwartimedevastation.Itisarguablethateconomicsuccesswouldhavecomeanyway,sothattheapparentsuccessofprotectionrepresentsa"pseudo-infant-industry"caseofthekinddiscussedinthetext.2.a.Theinitialhighcostsofproductionwouldjustifyinfantindustryprotectionifthecoststothesocietyduringtheperiodofprotectionwerelessthanthefuturestreamofbenefitsfromamature,lowcostindustry.b.Anindividualfirmdoesnothaveanincentivetobeardevelopmentcostsitselfforanentireindustrywhenthesebenefitswillaccruetootherfirms.Thereisastrongercaseforinfantindustryprotectioninthisinstancebecauseoftheexistenceofmarketfailureintheformoftheappropriabilityoftechnology.3.TherearelargermarketsinlargercountrieslikeBrazilandindustrieswhichbenefitfromimportsubstitutingpoliciescouldrealizeeconomyofscaleadvantagestherewhichwouldnotbeavailabletoindustriesproducingsolelyforthemarketofGhana.4.Thevalueofthemarginalproductoflaborintheproductionoffoodis9x$10=$90.a.Thewagewillbeequatedineachsectorwhentherearenodistortions.Thisoccurswhenthereare8workersinmanufacturingand12infoodproduction.Thewageofallworkerswillbe$90.Theoutputofeachsectorcanbefoundbycalculatingtheareaunderthemarginalproductoflaborcurves.Thiscurveisahorizontallineforfood,sooutputinthissectoris12x9=108.SummingtheareaundertheMPLcurveformanufacturingupto8workersresultsinoutputof110.b.Manufacturingoutputshrinksto3workers,andthereare17workersinthefoodsector.Foodoutputnowequals153whilemanufacturingoutputequals54.Thecostofthedistortionequalsthevalueofoutputlost,whichis$110.c.Theprobabilityofbeingemployedis1-(n+3/n)=3/nwherenisthenumberofcityworkers.Workerswillmigratetothecityuntilthewagetimestheprobabilityofbeingemployedequalsthewageofferedintheruralareawithcertainty.Therewillbe5workersinmanufacturing,15workersinagriculture,and2unemployedworkers.Theoutputofthemanufacturingsectoris54andforfoodis135.5.Underthesecircumstances,workersareboth"pulled"intotheurban,"modern"sectorby中华经济学习网www.100jingji.com官方网站：圣才学习网www.100xuexi.com 中华经济学习网www.100jingji.com官方网站：圣才学习网www.100xuexi.comthelureofhighwagesand"pushed"fromtheruralareasduetostagnantconditionsintheagriculturalsector.Tocorrectthisproblemofthebiastowardtheurban-manufacturingsector,explicitattentionshouldbepaidtomakingtheagriculturalsectormorerewarding,Inordertoretainlabor,theagriculturalsectormightbeprovidedwithwagesubsidiessothattherural-urbanwagegapisreduced.Policiescanalsobetargetedatpromotinglightruralenterpriseandagriculturalinvestmentwhichwouldincreasewagesthroughincreasingworkerproductivity.Inaddition,developmentoftheruralinfrastructureandsocialservicesmightincreasetherelativeattractivenessofthecountryside.6.Importquotasoncapital-intensivegoodsandsubsidiesfortheimportofcapitalequipmentfosterthedevelopmentofacapitalintensivesector,andthusofadualeconomy.Ifthecapital-intensivesectorpayshighwagesrelativetothetraditionalsector,theresultmayberural-urbanmigrationandtheemergenceofpersistenturbanunemployment.CHAPTER111.Ifeveryoneknowsthatanindustrywillgrowrapidly,privatemarketswillfunnelresourcesintotheindustryevenwithoutgovernmentsupport.Thereisneedforspecialgovernmentactiononlyifthereissomemarketfailure;theprospectofgrowthbyitselfisn"tenough.2.Avalidreasonforsupportinghigh-technologyindustrieswouldbethattheygeneratetechnologieswhichbenefitthewholeeconomy.Thevaluetothewholeeconomyofthisaspectofthehigh-technologyfirms"existenceexceedsthebenefitstothefirmsthemselves,andtherewillbetoolittleexpansionofthesefirmsfromasocialpointofview.Otherstatedbenefitsarenotvalidreasonsforindustrialpolicysincethemarketprovidesincentivesfortherealizationofthesebenefits.Theprotectionfromforeigncompetitionisalsoaspuriousargumentsince,ashasbeenshowninpreviouschapters,theeconomyasawholebenefitsfromcheapforeignhigh-technologygoods.Theexceptionbeingiftheindustryprovidesmonopolyrentsandtheforeigngovernmentistryingtocapturetheserentsforitshomeeconomy.3.Theresultsofbasicresearchmaybeappropriatedbyawiderrangeoffirmsandindustriesthantheresultsofresearchappliedtospecificindustrialapplications.ThebenefitstotheUnitedStatesofJapanesebasicresearchwouldexceedthebenefitsfromJapaneseresearchtargetedtospecificproblemsinJapaneseindustries.AspecificapplicationmaybenefitjustonefirminJapan,perhapssimplysubsidizinganactivitythatthemarketiscapableoffunding.Generalresearchwillprovidebenefitsthatspillacrossborderstomanyfirmsandmaybecounteringamarketfailure,externalitiespresentintheadvancementofgeneralknowledge.4.Asubsidyiseffectivewhenthefirmintheothercountrydoesnotproducewhenthedomesticfirmentersthemarket.Asthetexttablesshow,asubsidymaypresentacrediblethreatofentryanddetersproductionbytheotherfirm:asubsidyencouragesAirbustoproduceandBoeingnottoproduce.However,BoeingmaystillproduceevenifAirbusreceivesasubsidy.Airbus"returnislessthanthesubsidyifBoeingentersthemarket.5.Becausetheeconomyhaslimitedresources,atradepolicythatconveysastrategicadvantageononeindustrynecessarilyputsotherindustriesatsomestrategicdisadvantage.Itisnotpossibletoachieveastrategicadvantageinallindustries.Thispointshouldbeclearfromtheemphasisonmovementsalongproductionpossibilityfrontiersasillustratedinpreviouschapters.Korea"sacross-the-boardsubsidyprobablyhaslittleneteffectonthestrategicpositionoftheindustriesbecausewhileitprovideseachindustrywithadirectsubsidy,itindirectlyraisesall中华经济学习网www.100jingji.com官方网站：圣才学习网www.100xuexi.com 中华经济学习网www.100jingji.com官方网站：圣才学习网www.100xuexi.comindustries"costs.6.Thepotentialgainsforthehightechnologyindustriesdependontheextenttowhichagreatdealofgovernmentsponsoredresearchanddevelopmentisfilteredthroughthemilitarybudget.ThisisespeciallyrelevantwhenmilitaryexpendituresonresearchanddevelopmenthavespillovereffectsandproduceamarginalsocialgainsofknowledgewhichbenefitotherfirmsinU.S.industry.However,thereareseveralcaveatstothisargument.Totheextentthatmilitaryindustryisparticularlyconcentratedandoligopolistic,theremaybeaseriousmarketfailure.Moreimportantly,thereremainstheissueofhowrelevantandapplicablewillbeanyknowledgespilloversfrommilitaryresearchanddevelopmenttothehightechnologysectors.Moreover,themilitaryfieldsmaybesiphoningoffmanyhighlytalentedresearchersfromcivilianhigh-technologyindustries.Muchofitmaynotbewell-suited.Inthiscase,thegoalofdevelopingabroadapplicationtohightechnologythroughmilitaryresearchwouldnotbeawell-targetedprogram.7.TheonlypossiblejustificationforJapan’sinvestmentsinsteelandinsemiconductorsisthattheseinvestmentscouldgeneratemarginalsocialbenefitsbesidesthemarketreturn.Yetunfortunately,untilnow,economistsstillhavenotidentifiedimportantmarginalsocialbenefitsgeneratedbyinvestmentinsteelandthepossibletechnologicalspilloversofsemiconductortargetingseemtohavebeenfalsifiedbyexperience.Thereasonwhythetextholdstheviewthatsemiconductortargetingwaspossiblyabetterpolicythansteeltargetingisthatthetextagreeswiththeideathatanygovernmentactivepolicymustoffsetsomepreexistingdomesticmarketfailure.Thesteelindustryhadnoobviousmarketfailureinthelate1960sanditwasbettertoleavetheindustrydevelopinafreemarketeconomy.Yetthesemiconductorindustrywasahigh-techindustryandthefirmsinthisindustryarenotabletocapturethebenefitsofpartoftheircontributiontoknowledgethatspillsovertootherfirms,thisisakindofmarketfailure.8.TheFrenchmaybefollowinganactivenationalistculturalpolicyasaneconomicorstrategictradepolicytotheextentthatculturalactivities,suchasart,music,fashion,andcuisine,arelinkedtootherFrenchmajorindustries.Indeed,thefashionindustryistiedtothehugetextileindustry,aswellastotheretailsectorandadvertisingservices.Onecouldarguethatthepromotionoffashion,art,andmusicwillbenefitbothtourism,andtheselargestrategictradesectorsoftheFrencheconomy.However,theexistenceofmarketfailuresisnotclearlydocumentedintheculturalsectorexcepttotheextentthatthereareotherlesstangibleexternalities.Furthermore,theculturalpromotionsarenot,ineconomicterms,thefirstbestapproachtosupportinglargerindustries.中华经济学习网www.100jingji.com官方网站：圣才学习网www.100xuexi.com'