国际贸易芬斯特拉版人大版练习题答案 - 图文

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Foreign Offshoring of Goods and Services

1.Consider an offshoring model in which the labor hours of four activities in the

United States and Mexico are as follows:

Hours of Labor Used in Each Activity (Per Unit of Output)AssemblyProductionServicesComponentOf?ceR&DLow-skilled laborMexico: 20Mexico: 12Mexico: 8Mexico: 4U.S.: 5U.S.: 3U.S.: 2U.S.: 1High-skilled laborMexico: 4Mexico: 4Mexico: 8Mexico: 40U.S.: 1U.S.: 1U.S.: 2U.S.: 10High-/Low-skilled ratio1/51/31/110/1R&D, research and development.Note that labor hours in Mexico are four times those in the United States, re?ectingMexico’s lower productivity. Also note that the ratio of high-skilled to low-skilledlabor used in each activity increases as we move to the right, from 1/5 in assembly to10/1 in R&D.

Suppose that the wage of U.S. low-skilled workers is $10 per hour and that of high-skilled workers is $25 per hour and that the wage of Mexican low-skilled workers is$1 per hour and that of high-skilled workers is $5 per hour (these values are made upto be convenient, not realistic). Also suppose that the trade costs are 25%, 30%, or50%, which means that an additional 25%, 30%, or 50% is added to the costs of off-shoring to Mexico.

a.Fill in the blank cells in the following table by computing the costs of produc-tion of each activity in each country (two cells are ?lled in for you).

7S-55

S-56Solutions ■Chapter 7 Foreign Offshoring of Goods and Services

Answer: In italics in the following table:

Assembly

Mexico

United States

Imported by U.S. from Mexico, Trade costs ?25%

Imported by U.S. from Mexico, Trade costs ?30%

Imported by U.S. from Mexico, Trade costs ?50%

R&D, research and development; U.S., United States.

Component Production$32$55$40$41.6$48

Of?ce Services

$48$70$60$62.4$72

R&D$204$260$255$265.2$306

$40$75$50$52$60

b.With trade costs of 50%, where is the value chain sliced? That is, which activities

are cheaper to import from Mexico and which are cheaper to produce in theUnited States?

Answer: With trade costs of 50%, assembly and component production are donein Mexico because the gross costs of importing these activities are lower thantheir respective costs in the United States. On the other hand, of?ce services andR&D activities are done in the United States.

c.With trade costs of 30%, and then 25%, where is the value chain sliced?

Answer: With trade costs of 25%, all activities are offshored to Mexico, whereaswith trade costs of 30%, assembly, component production, and of?ce services aredone in Mexico (R&D is still done in the United States).

2.Consider an offshoring model in which Home’s high-skilled labor has a higher rela-tive wage than Foreign’s high-skilled labor and in which the costs of capital and tradeare uniform across production activities.

a.Will Home’s offshored production activities be high or low on the value chain

for a given product? That is, will Home offshore activities that are high-skilled-labor-intensive or low-skilled-labor-intensive? Explain.

Answer: The high relative wage of Home high-skilled labor makes high-skilled-labor- intensive activities more expensive at Home relative to Foreign. Equiva-lently, the low relative wage of low-skilled labor makes low-skilled-labor-intensive activities less expensive at Home relative to Foreign. As a result, Homewill undertake production activities lower on the value chain while offshoringhigher value activities to Foreign.

b.Suppose that Home uniformly increases its tariff level, effectively increasing the

cost of importing all goods and services from abroad. How does this affect theslicing of the value chain?

Answer: A uniform increase in the tariff level causes fewer activities to be off-shored. The slicing of the value chain re?ects this increased cost as a rightwardshift; Home expands the set of activities that it does at Home to include incre-mentally higher value activities, whereas the set of high value offshored activitiesshrinks.

c.Draw relative labor supply and demand diagrams for Home and Foreign show-ing the effect of this change. What happens to the relative wage in each coun-try?

Answer: An expansion in the set of production activities done at Home (to in-clude higher value ones) increases the average skill intensity of Home produc-tion. This increases the relative demand for high-skilled labor at Home. Simi-larly, because Foreign ceases to do its least skill-intensive activities, the average

Solutions ■Chapter 7 Foreign Offshoring of Goods and ServicesS-57

skill-intensity in Foreign increases and hence the relative demand for high-skilledlabor increases. See the following ?gure.

High-/Low-skilled Wages,WH / WLHome supplyHigh-/Low-skilled Wages, WH* / WL*Foreign supplyBAB*A*Home demandForeign demandHigh-/Low-skilled Labor, H* / L*(b) Foreign

High-/Low-skilled Labor, H / L(a) Home

3.Consider a U.S. ?rm’s production of automobiles, including R&D and component

production.

a.Starting from a no-trade equilibrium in a PPF diagram, illustrate the gains from

offshoring if the United States has comparative advantage in component pro-duction.

Answer: See the following ?gure, where the offshoring equilibrium is Band C.

R&D

Slope = (PC / PR)ACU.S. firm

imports of R&D

AY0BY1Slope = (PC / PR)WComponentsU.S. firm exports ofcomponents

S-58Solutions ■Chapter 7 Foreign Offshoring of Goods and Services

b.Now suppose that advances in engineering abroad decrease the relative price of

research and development. Illustrate this change on your diagram and state theimplications for production in the United States.

Answer: See the following ?gure, where the new equilibrium is B?and C?.

R&D

C?Slope = (PC / PR)ACU.S. firmimports ofR&D

Y2AY0BB?Slope = (PC / PR)W1Slope = (PC / PR)W2Components

U.S. firmexports ofcomponents

Y1c.Does the U.S. ?rm gain from advances in research and development abroad?

Explain why or why not.

Answer: Because the United States imports R&D and exports components, adecrease in the relative price of R&D abroad represents an improvement in theU.S. terms of trade; as a result, U.S. output increases to Y2so there are gains forthe United States.

4.Consider the model of a ?rm that produces ?nal goods using R&D and components

as inputs, with cost data as follows:

Components:

Total costs of production ?PC?QC?100Earnings of high-skilled labor ?WH?HR?10Earnings of low-skilled labor ?WL?LC?40Earnings of capital ?R?KC?50

Share of total costs paid to high-skilled labor ?10 / 100 ?10%Share of total costs paid to low-skilled labor ?40 / 100 ?40%

R&D:

Total costs of R&D ?PR?QR?100Earnings of high-skilled labor ?WH?HR?40Earnings of low-skilled labor ?WL?LR?10Earnings of capital ?R?KR?50

Share of total costs paid to high-skilled labor ?40 / 100 ?40%Share of total costs paid to low-skilled labor ?10 / 100 ?10%

Solutions ■Chapter 7 Foreign Offshoring of Goods and ServicesS-59

a.Which factor(s) is(are) components intensive? Which factor(s) is(are) R&D in-tensive?

Answer: Component production is intensive in the use of low-skilled labor, be-cause the cost share of low-skilled labor in components (40%) exceeds the costshare of low-skilled labor in R&D (10%). Similarly, R&D is intensive in the useof high-skilled labor, because the cost share of high-skilled labor in R&D (40%)exceeds the cost share of high-skilled labor in components (10%). Notice thatcapital is used equally in both activities, so it is not intensive in either one.b.Suppose that due to the opening of trade, the price of components falls by

?PC/ PC??10%, and the price of R&D remains unchanged, ?PR/ PR?0.Using the hint below, calculate the change in the wage of high-skilled and low-skilled labor.

Hint:

We follow a procedure similar to that used in Chapter 4when calculating thechange in factor prices in the Heckscher-Ohlin model. First, write the total costsin each activity as consisting of the payments to labor and capital:PC?QC?R?KC?WH?HC?WL?LC,for componentsPR?QR?R?KR?WH?HR?WL?LR,for R&D

Because we assume that 50% of costs in components or R&D are always paid tocapital, then R?KC?0.5(PC?QC) and R?KR?0.5(PR?QR), so we canrewrite the above two equations as:

0.5(PC?QC) ?WH?HC?WL?LC,for components0.5(PR?QR) ?WH?HR?WL?LR,for R&D

Taking the change in these equations:

0.5(?PC?QC) ??WH?HC??WL?LC,for components0.5(?PR?QR) ??WH?HR??WL?LR,for R&D

Dividing the equations by (?PC?QC) and (?PR?QR), respectively, we can re-write the equations as:

?PC?WH??0.5?PCWH??

??????

WH?HC?PC?QC??

?WL??

WL??

WL?LC?, for componentsPC?QC?

?PR?WH0.5???PRWH??

WH?HR?WL???PR?QRWL????