In

Name: _______________________

Economics 3563: International Trade

Spring 2017

Data/Excel Assignment (70 Points Total)

Due: TBD

Answer Sheet

Spreadsheet Answers (points in parentheses)

(Do not write anything in the spaces for questions 1 – 7) 1) Enter the proper quantities (2)______

2) Use formula to calculate relative price of food (3)______

3) Use formula to calculate relative price of cars (3)_______

4) Write out the zero profit conditions as a system of four equations in four unknowns (10)___

5) Write out the proper matrix of coefficients (8)______

6) Use the MINVERSE function to calculate the inverse of the coefficient matrix (8)_____

7) Use the MMULT function to calculate the real factor payments (8)_____

8) Use of formula to calculate the income gap for each country (4)

Written Answers (points in parentheses)

Based on the numbers generated in your spreadsheet answer the following questions

8) Does this exercise confirm the Stolper-Samuelson theorem?(6) YES / NO

Explain:

9) Does this exercise confirm the Factor Price Equalization theorem?(6) YES / NO

Explain:

10) How does income inequality change in Home?(6) INCREASE / DECREASE

11) How does income inequality change in Foreign?(6) INCREASE / DECREASE

Note for questions 8 – 11 your Excel spreadsheet should back up your answers. If not, they will

be marked incorrect.