topgradehub-essays

International Trade Theory and Policy

International Trade Theory and Policy custom essay

We Write Essays For Students

Tell us about your assignment and we will find the best writer for your paper

Write My Essay For Me

International Trade Theory and Policy

Homework 3

Q2 (20 points): Suppose that the wage ratio of skilled labor v.s. unskilled labor, wH/wL, is higher at home than at the foreign country and that production involves four stages/tasks, namely, R&D, marketing, components, and assembly ordered from the most skill intensive to the least skill intensive. Now consider a sharp increase in trade costs for shipping components and final goods between the two countries.

(a)          Use a relative skilled-labor demand- and supply-curve graph to show the effect of increased trade costs on home country’s wH/wL.

(b)          Use another relative skilled-labor demand- and supply-curve graph to show the effect of increased trade costs on foreign country’s wH/wL.

Your answer:

Q3 (20 points): Suppose the wage ratio of skilled labor v.s. unskilled labor, wH/wL, is highest in country A, intermediate in country B, and lowest in country C, and country C’s production involves two stages/tasks, the skilled-labor intensive R&D and the unskilled-labor intensive components.

 

(a) To which country should country C offshore its component production so that country C’s output is maximized?

(b) Use a PPF-indifference curve graph with components on the X axis and R&D on the Y axis to show the gains from offshoring for country C in the above case. In the graph, identify the amount of R&D exports and component imports.

(c) How will the gain from offshoring change if country C offshores its component production to the other foreign country?

(d) Please discuss some other effects of offshoring that are not reflected in the graph.

Q4 (40 points): Using a domestic-market demand- and supply-curve graph,

(a)          show the impact of tariff on a large country’s import price, domestic demand, domestic supply, import quantity, consumer surplus, producer surplus, government revenue, and total welfare;

(b)          Identify the country’s terms-of-trade welfare gain in your graph. How should you calculate the size of the terms-of-trade welfare gain?

(c)           Is the country unambiguously better off as a result of the tariff? When would the country be unambiguously better off?

(d)          In the same graph, show how to achieve the same import quantity with an import quota;

(e)          When would the tariff and the import quota lead to the same amount of welfare change?

Your answer:

 

Place an order of a custom essay for this assignment with us now. You are guaranteed; a custom premium paper being delivered within its deadline, personalized customer support and communication with your writer through out the order preparation period

order-now-blue

 

ORDER A SIMILAR ESSAY WRITTEN FROM SCRATCH

Save time and money with our essay writers for hire. If you are in search of a dependable academic support provider that offers more than just typical writing services, you have come to the right place. As a cost-effective essay writing service, we not only assist you in crafting outstanding papers but also provide complimentary features.

PLACE YOUR ORDER

Share your love