克鲁格曼国际经济学答案53129

Chapter 3

1. In 1986, the price of oil on world markets dropped sharply. Since the United

States is an oil-importing country, this was widely regarded as good for the U.S. economy. Yet in Texas and Louisiana 1986 was a year of economic decline. Why?

It can deduce that Texas and Louisiana are oil-producing states of United States. So when the price of oil on world markets declined, the real wage of this industry fell in terms of other goods. This might be the reason of economic decline in these two states in 1986.

2。An economy can produce good 1 using labor and capital and good 2 using labor and land. The total supply of labor is 100 units. Given the supply of capital, the outputs of the two goods depends on labor input as follows:

To analyze the economy ’s production possibility frontier, consider how the

output mix changes as labor is shifted between the two sectors.

a. Graph the production functions for good 1 and good 2.

),()

,(22221111L K Q Q L K Q Q ==

Production Function for Good 10

25.138.148.657.56673.680.787.493.9100010203040506070

8090

1000102030405060708090100Labor Input for Good 1Output Production Function for Good 239.852.561.869.375.881.586.791.495.5100405060708090

100

Output

b. Graph the production possibility frontier. Why is it curved?

The PPF is curved due to declining marginal product of labor in each good. The

total labor supply is fixed. So as L 1 rises, MPL 1 falls; correspondingly, as L 2 falls, MPL 2 rises. So PP gets steeper as we move down it to the right.

2. The marginal product of labor curves corresponding to the production functions in problem2 are as follows:

a. Suppose that the price of good 2 relative to that of good 1 is 2. Determine

graphically the wage rate and the allocation of labor between the two

sectors.

With the assumption that labor is freely mobile between sectors, it will

move from the low-wage sector to the high-wage sector until wages are

equalized. So in equilibrium, the wage rate is equal to the value of labor ’s

marginal product.

2/122211=⨯=⨯P P P MPL P MPL Q 1

Q 2

L 1 L 2 PPF ),(2222L K Q Q =),(1111L K Q Q =100100

The abscissa of point of intersection illustrated above should be between

(20, 30). Since we only have to find out the approximate answer, linear

function could be employed.

The labor allocation between the sectors is approximately L 1=27 and L 2=73.

The wage rate is approximately 0.98.

b. Using the graph drawn for problem 2, determine the output of each sector.

Then confirm graphically that the slop of the production possibility

frontier at that point equals the relative price.

The relative price is P 2/P 1=2 and we have got the approximate labor allocation,

so we can employ the linear function again to calculate the approximate

output of each sector: Q 1=44 and Q 2=90.

c. Suppose that the relative price of good 2 falls to 1. Repeat (a) and (b). Q 1 Q 2

L 1 L 2

PPF

),(2222L K Q Q =),(1111L K Q Q =1001002

1

-=slope