Solutions ■Chapter 7 Foreign Offshoring of Goods and ServicesS-65
though, gains from offshoring are always greater than the situation with no-trade.
10.In Figure 7-11, we saw that a fall in the relative price of components leads to an in-crease in the amount of components imported, but that the amount of R&D ex-ported from Home does not necessarily increase. To explore this further, completethe following:
a.Let the relative price of components continue to fall in Figure 7-11, and show
in a graph what happens to the equilibrium point on the isoquant for the ?nalgood.
Answer: As the relative price of components continues to fall, the use of com-ponents in the ?nal good increases. Imports of components increase as the equi-librium production point moves out to the ?atter portion of the ?nal good iso-quant, and the level of ?nal good output increases (but at a diminishing rate dueto diminishing returns in production). See the following ?gure.
R&D
Slope = (PC / PR)AY2B?BC?ACY1Y0Slope = (PC / PR)W2Slope = (PC / PR)W1Components
b.Now draw another graph that has the relative price of components on the ver-tical axis and the imports of components on the horizontal axis. Start at the no-trade relative price of components, where imports are zero. Then label the var-ious world-relative prices of components on the vertical axis, and graph thequantity of imports at each price. Can we be sure that the import demand curveslopes downwards?
Answer: As the relative price of components decreases from the Home autarkylevel, Home components imports as well as the ?nal goods produced increase.As long as incremental components are still useful in ?nal good production, com-ponents imports will increase as their relative price decreases, which is guaran-teed by the shape of the isoquants. See the following ?gure.
S-66Solutions ■Chapter 7 Foreign Offshoring of Goods and Services
PC / PR
(PC / PR) A
(PC / PR)W1
(PC / PR)W2
Home Components Imports
c.Now draw a new graph that has the relative price of R&D on the vertical
axis and the exports of R&D on the horizontal axis. Start at the no-trade rela-tive price of R&D, where exports are zero. Then label the various world-relativeprices of R&D on the vertical axis, and graph the quantity of exports at each price. When the relative price of R&D is high enough, what do you no-tice about the export supply curve?
Answer: See the following ?gure:
PR / PC
(PR / PC)W2
(PR / PC)W1
(PR / PC)A
Home R&D Exports
As the relative price of R&D increases from its autarky level, Home specializesfurther in R&D services and exports increase. However, for a suf?ciently highrelative price, import demand in the rest of the world diminishes as countriesabroad substitute components for R&D in ?nal good production. As a result, asHome approaches full specialization in R&D, exports of that activity approachzero.
Solutions ■Chapter 7 Foreign Offshoring of Goods and ServicesS-67
11.Why might it be relatively easier for an undeveloped country like India to export ser-vice activities through offshoring than to participate in the global economy by pro-ducing manufacturing components?
Answer: Because offshoring of manufactures involves the trade of intermediate in-puts across several borders, there is an extra cost associated with transporting thegoods. Therefore, a country must have good infrastructures such as developed road-ways to participate in the global economy. In India, for example, communicationstechnology developed rapidly whereas transportation developed more slowly, whichallowed the South Asian country to partake in service offshoring.
12.It is widely noted that even though China is the favored destination for manufactur-ing offshoring, it is far behind India in the business of offshored services. What aresome differences between these two countries that may account for this causal ob-servation?
Answer: Although wages are also low in India, due to its weak transportation infra-structure it is unable to successfully compete against China in manufacturing off-shoring. However, it has an advantage over China in service offshoring because thecountry has developed an advanced communication infrastructure. Moreover, as aformer British colony, India has a pro?ciency in the English language. The workforcein India is well educated and highly skilled in information technology. In addition,Tarun Khanna, a professor at the Harvard Business School, notes that India has athriving entrepreneurial effort unhampered by government bureaucracy, unlikeChina (The McKinsey Quarterly,2004). These include a low level of government in-tervention in the Indian capital markets and no regulations in industries such assoftware.
13.Why is the offshoring of white-collar or high-skill-intensive jobs a concern for manyAmericans?
Answer: Traditionally, white-collar workers have been relatively insulated from for-eign competition in comparison with blue-collar workers. For decades the unem-ployment rate of high-skill-intensive jobs, such as computer programming, was wellbelow the national average. However, with the trend reversing between 2001 and2002, the expected job security associated with advanced training and experiencecame into question. Although the loss of white-collar jobs was offset by the increasein service employment, many Americans fear that it is unclear how job opportunitieswill adjust to the new labor challenges.
国际贸易》芬斯特拉版人大版练习题答案
