澳洲统计学课程论文.docx

澳洲统计学课程论文.docx

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澳洲统计学课程论文

Econ317/417InternationalTradeandPayments

Assessment

Question1

Part1a）

Theformulatocalculatethepre-tradepriceratiosis

WhereP1isthepriceofwine

P2isthepriceofcheese

isthelabourhoursusedtoproducewine

isthelabourhoursusedtoproducecheese

ForAustralia,pre-tradepriceratiois15/10=1.5

ForNewZealand,pre-tradepriceratiois10/4=2.5

Part1b）

ProductionfrontierofAustralia

ProductionfrontierofNewZealand

Part1c）

Theopportunitycostforproducing1kiloofcheeseinNewZealandis2/5=0.4bottleofwine.Theopportunitycostforproducing1kiloofcheeseinAustraliais0.6667bottleofwine.Therefore,NewZealandhasaloweropportunitycostonproducingwineandshewillfocusonproducingwineinthiscasescenario.Australiawillfocusonproducingcheese.

Fromthequestionweknowthatthepriceratioaftertradeis0.5.sofrompart1a）weknowthatinAustraliawillproducewineinsteadofcheese.Atotalof30/15=2millionbottlesofwinecanbeproduced.Similarly,NewZealandwillproduce20/4=5millionkilogramsofcheeseandtheyexchangeattheratioof0.5.AustraliawillexportwineandNewZealandwillexportcheese

Part1d）

After-trade,Australiahas1millionbottlesofwineand2millionkilosofcheese.NewZealandwillhave3millionkilosofcheeseand1millionbottlesofwinewithfreetrade

ThefrontierafterthetradeforAustraliaisshownbelow

ThefrontierafterthetradeforNewZealandisshownbelow

Part1e）

Bothcountriesgainfromthetrade.Theconsumptionpossibilitiesarelargerthantheproductionpossibilityforbothcountries,byobservingchartsinpart1d）.fromthechart,onecanseethatAustraliacanonlyconsumewithintheproductionfrontierofthechartwhiletheconsumerfrontierbecomestheredlineasindicatedinthechart.Clearlytheareaunderthefrontierislargerwhichmeansthecountryisbetteroff.SimilarargumentcanbedrawnforNewZealand

Question2

Part2a）

ThepossibleproductionfrontierofHongKongisshownbythefigurebelow

AsHongKongislabourabundantandproducingclothesislabourintensive,itislikelythattheunitcostofproducingclothesislowerthanthatofproducingcarinHongKong,resultinginalesssteepslopeinthefrontier

ThepossibleproductionfrontierofJapanisshownbythefigurebelow

AsJapaniscapitalabundantandproducingclothesiscapitalintensive,itislikelythattheunitcostofproducingcarsislowerthanthatofproducingclothesinJapan,resultinginasteeperslopeinthefrontier

Part2b）

Withtheinformationgiven,itisinsufficienttodrawaconclusionthatwhichcountryhasthecomparativeadvantageinproducingclothesorcars.AlthoughitislikelythatHongKonghasacomparativeadvantageinproducingclothes,actualdataisneededtodrawtheconclusion

Part2c）

ThetheoremsuggeststhatHongKongisrelativelybetteronlabourintensiveindustryandJapanisrelativelybetteroncapitalintensiveindustryandtheywilltradewitheachotherwhichHongKongsellsclothestoJapanandbuyscarsfromJapan.Inaggregateterms,totalproductionpossibilitiesincreaseaftertrade

Part2d）

Theabovescenariocanbeshownbythefollowinggraph

export

Import

Question3

Part3a）

SolvingtheequationandweknowthattheequilibriumquantityQ*solves

10+4Q*=100-2Q*

Q*=15,P*=70,whenQ*=15

Theequilibriumpoint（P*,Q*）=（70,15000）

Graphically

x-axisistherelativequantityofproductX

y-axisistherelativepriceofproductX

Part3b）

Fromthedemandcurve

P=100–2Q,nowP=50,thecorrespondingquantitysuppliedisQ=10.QuantitydemandedQ’is25.Therefore,theimportedquantitywouldbeQ’–Q=15,asindicatedinthegraph

Importedquantity

Part3c）

Asitisasmallcountry,atariffcannotlowertheforeignpriceofthegooditimports.Asaresultthepriceincreasesby20%accordingandthenewpriceafterthetariffis1.2P*=60.Thenewquantityimportedisshowninthegraph

tariff

Part3d）

Consumersurplus（CS）afterthetariffisP’*Q’/2,P’=60,Qd’=20000,therefore

CS=20*1000*60/2=600,000

Producersurplus（PS）afterthetariffisP’*Q’/2,P’=60,Qs’=12500,therefore

PS=12.5*1000*60/2=375,000

ThetaxcollectedafterthegainisQd-Qs=7.5*1000/2=225,000

Question4

ThecorrespondingexportsofXiscalculatedbelow

Withtheapplicationoftheformulaasbelow

Theoffercurveisshownasbelow

X-axisisthequantityofexportssuppliedandY-axisshowstheimportsofYcorrespondingtotheexportsbyX

Theformulaforcalculatingelasticityofdemandis

Where

Q2isthenewquantitydemanded

Q1istheoldquantitydemanded

P2isthenewprice

P1istheoldprice

Substitutingrelevantnumbers,weget

From（a）to（b）,ed=1.3,from（b）to（c）:

ed=1.0,from（c）to（d）,ed=0.65

Detailedcalculationcanbefoundbelow

From（a）to（b）,

demandiselastic

From（b）to（c）,

demandisindifferent

From（c）to（d）,

demandisinelastic

Question5

Inthefreearea,thesmalleconomywillincreasetheiraggregateimportasthetariffhasbeenremoved.However,inthiscasescenario,theamountofimportfromcountriesthatwouldbeinfreetradeareaincreasesandthesmalleconomyreducestheimportfromthelowercostcountrieswhicharenotmembersofthefreetradearea.

Question6

Part6a）

Theformulatocalculatetheintraindustryindexforacommodityis

Withtheaboveformula,theintraindustryindexofindividualgoodsforeachcountryiscalculatedandshownasbelow

Part6b）

Similarly,theintraindustryindexforeachcountrycanbecomputedusingthesamemethod.Theresultisshownbelow

Part6c）

Basedontradetheory,countryChaslargepartoftradeintraindustryastheindexofcountryCisclosesttooneamongthreecountries.CountryAhastheminimumpartoftradeintraindustryastheindexofcountryAisthelowestamongthreecountries.

Question7

ThecalculationoftheAustraliadollarindexcanbesummarizedbythetablebelow

Theformulaviewisgivenbybelow

Question8

Fromthedefinitionofpurchasingpowerparity,wecanhavethefollowingmathematicaldefinition.Therealeffectiveexchangerate,r,isadjustedfromnominalexchangerate（e）andtheratiooftheforeignpricelevel（Pf）tothedomesticpricelevel（Pd）.Mathematically,itcanbeshownas

r=e*Pf/Pd

TherealeffectiveexchangeindexforAustraliain2009,accordingtothedatainthisquestionandquestion7,isshowninthetablebelow

TheA$dollarindexshouldbe1.10onthebase1996=1

GiventheCPIat169in2009onthebase1996=1,thetheoreticalchangeintheAU

Withtherealeffectiveexchangeratelessthan1,Australiaexperiencedarealappreciation.Therefore,theinternationalcompetitivenessofAustraliahasdecreasedduringtheperiod.