Question

Labor hours in Mexico are four times those in the United States, reflecting Mexico’s lower productivity. Also note that the ratio of high-skilled to low-skilled labor used in each activity increases as we move to the right, from 1/5 in

Question

a. Of two products, rice and paintings, which product do you expect to have a higher index of intra-industry trade? Why?
b. Access the U.S. TradeStats Express website at tse.export.gov/. Click on “National Trade Data” then “Global Patterns of

Question

a. Fill in two more rows of the table using the same approach as for the first two rows.
b. Notice that the fraction of workers finding a job each year (column 2) has the formula:
Fraction Finding

Question

Our derivation of the gravity equation from the monopolistic competition model used the following logic:
(i) Each country produces many products.
(ii) Each country demands all of the products that every other country produces.
(iii) Thus, large

Question

Starting from the long-run trade equilibrium in the monopolistic competition model, as illustrated in Figure 6-7, consider what happens when industry demand D increases. For instance, suppose that this is the market for cars and lower gasoline prices generate higher

Question

Starting from the long-run equilibrium without trade in the monopolistic competition model, as illustrated in Figure 6-5, consider what happens when the Home country begins trading with two other identical countries. Because the countries are all the same, the number

Question

In this question, we use the Rybczynski theorem to review the derivation of the Heckscher-Ohlin theorem.
a. Start at the no-trade equilibrium point A on the Home PPF in Figure 4-2, panel (a). Suppose that through immigration, the amount

Question

Suppose that computers use 2 units of capital for each worker, so that KC = 2 ?¢ LC, whereas shoes use 0.5 units of capital for each worker, so that KS = 0.5 ?¢ LS. There are 100 workers and

Question

In the short-run specific-factors model, consider a decrease in the stock of land. For example, suppose a natural disaster decreases the quantity of arable land used for planting crops.
a. Redraw panel (a) of Figure 5-11 starting from the

Question

Consider an increase in the supply of labor due to immigration, and use the long-run model. Figure 5-8 shows the box diagram and the leftward shift of the origin for the shoe industry. Redraw this diagram, but instead, shift to