Homework 4: Immigrants & FDI

New Theories for International Trade

Q1: List and compare the short run and the long run impacts of immigrants and FDI on wage and rentals in Home, assuming that immigrants and FDI enter Home.

Q2: A housekeeper from the Philippines is contemplating immigrating to Singapore in search for higher wages. Suppose the housekeeper earns approximately $2000 annually and expects to find a job in Singapore worth approximately $5,000 annually for a period of three years. Furthermore, assume that living in Singapore is $500 more per year than at home

a.What can we say about the productivity of housekeepers in Singapore v.s. the Philippines? Explain.

b.What is the total gain to the housekeeper from migrating?

c.Is there a corresponding gain for the employer in Singapore? Explain.

Q3: a. Explain Inter-industry trade and Intra-industry trade.

b. What's the meaning for that the index of intra-industry trade is zero and one, respectively.

c. Explain the Gravity equation in Trade. Hint, explain each term, then discuss the relationships of those terms.

d. What's the two main features of monopolistic competition.

Q4: List a good and a service, which are heavily depends on offshoring. Do you think that offshoring is a good thing or bad thing for your home country? Why?