《国际经济学》+答案Chapter4.docVIP

CHAPTER 4 Resources and Trade:The Heckscher-Ohlin Model (Factor Endowment Theory) *Comparative advantage is influence by the interaction between relative abundance and relative intensity. *Relative abundance: the proportions of different factors of production are available in different countries. If(T/L)H(T/L)F, Home is labor-abundant and Foreign is land-abundant “per captia”,“relative” , no country is abundant in everything. *Relative intensity: the proportions of different factors of production are used in producting different goods. At any given factor prices, if (TC/LC)(TF/LF), production of Cloth is labor-intensive and production of Food is land-intensive. A good can’t be both labor-intensive and land-intensive. (Factor-proportions theory) §1. A Model of Two-Factor Economy 1. Assumption of the model The same two factors are used in both sectors: T、L ; Cloth、Food. (1)Alternative input combinations: In each sector, the ratio of land to labor used in production depends on the cost of labor relative to the cost of land, w/r. Figure 4A-2 w/r↑ T↑L↓ T/L↑(TC/LC↑and TF/LF↑) (2) Relative intensity At any given wage-rental ratio, food production use a higher land-labor ratio, food production is land-intensive and cloth production is labor-intensive. Figure 4-2 2.Factor price and goods prices (1)One-to-one relationship Because cloth production is labor-intensive while food production is land-intensive. The one dollar worth isoquant line of cloth and food are shown as Figure4-3-1.The two isoquants CC and FF are tangent to the same unit isocost line. Figure 4-3-1 When PC rises, the slope of the unit isocost line w/r rises, that is, there is one-to-one relationship between factor price ratio w/r and the relative price of cloth PC/PF (Figure4-3-2). The relationship is illustrated by the curve SS. (Suppose the economy produce both cloth and food). Figure 4-3-2 Figure 4-3-3 (2)Stolper-Sammelson effect If the relative price of a good rises, the real