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Chapter 8: Problem 3

The U.S. Census Bureau keeps statistics on U.S. imports and exports on its website. The following steps will take you to the foreign trade statistics. Use them to answer the questions below. i. Go to the U.S. Census Bureau's website at www.census.gov ii. Under the heading "Topics" select "Business" and then select "International Trade" under the section "Data by Sector" in the left menu bar iii. At the top of the page, select the tab "Data" iv. In the left menu bar, select "Country/Product Trade" v. Under the heading "North American Industry Classification System (NAICS)-Based," select "NAICS web application" vi. In the drop-down menu "3-digit and 6 -digit NAICS by country," select the product category you are interested in, and hit "Go" vii. In the drop-down menu "Select 6 -digit NAICS," select the good or service you are interested in, and hit "Go" viii. In the drop-down menus that allow you to select a month and year, select "December" and "2013," and hit "Go" ix. The right side of the table now shows the import and export statistics for the entire year 2013 . For the questions below on U.S. imports, use the column for "Consumption Imports, Customs Value Basis." a. Look up data for U.S. imports of hats and caps: in step (vi), select "(315) Apparel \& Accessories" and in step (vii), select "(315220) Men's and Boys' Cut and Sew Apparel." From which country do we import the most apparel? Which of the three sources of comparative advantage (climate, factor endowments, and technology) accounts for that country's comparative advantage in apparel production? b. Look up data for U.S. imports of grapes: in step (vi), select "(111) Agricultural Products" and in step (vii), select "(111332) Grapes." From which country do we import the most grapes? Which of the three sources of comparative advantage (climate, factor endowments, and technology) accounts for that country's comparative advantage in grape production? c. Look up data for U.S. imports of food product machinery: in step (vi), select "(333) Machinery, Except Electrical" and in step (vii), select "333241 Food Product Machinery." From which country do we import the most food product machinery? Which of the three sources of comparative advantage (climate, factor endowments, and technology) accounts for that country's comparative advantage in food product machinery?

Short Answer

Expert verified
Question: After analyzing the U.S. import data for hats and caps, grapes, and food product machinery, discuss the largest importing source for each product and the probable source of their comparative advantage in the related industry.

Step by step solution

01

Access U.S. Census Bureau's Foreign Trade Data

Follow the steps provided in the exercise, and obtain the import statistics for three categories: Hats and Caps, Grapes, and Food Product Machinery.
02

Analyze the Data of Hats and Caps Imports

In step (vi), select "(315) Apparel & Accessories" and in step (vii), select "(315220) Men's and Boys' Cut and Sew Apparel." Find out the country with the highest import value in this category.
03

Identify and Discuss the Source of Comparative Advantage for Hats and Caps

Determine which of the three sources of comparative advantage (climate, factor endowments, and technology) accounts for that country's comparative advantage in apparel production.
04

Analyze the Data of Grapes Imports

In step (vi), select "(111) Agricultural Products" and in step (vii), select "(111332) Grapes." Find out the country with the highest import value in this category.
05

Identify and Discuss the Source of Comparative Advantage for Grapes

Determine which of the three sources of comparative advantage (climate, factor endowments, and technology) accounts for that country's comparative advantage in grape production.
06

Analyze the Data of Food Product Machinery Imports

In step (vi), select "(333) Machinery, Except Electrical" and in step (vii), select "333241 Food Product Machinery." Find out the country with the highest import value in this category.
07

Identify and Discuss the Source of Comparative Advantage for Food Product Machinery

Determine which of the three sources of comparative advantage (climate, factor endowments, and technology) accounts for that country's comparative advantage in food product machinery production.

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Most popular questions from this chapter

For each of the following trade relationships, explain the likely source of the comparative advantage of each of the exporting countries. a. The United States exports software to Venezuela, and Venezuela exports oil to the United States. b. The United States exports airplanes to China, and China exports clothing to the United States. c. The United States exports wheat to Colombia, and Colombia exports coffee to the United States.

Shoes are labor-intensive and satellites are capitalintensive to produce. The United States has abundant capital. China has abundant labor. According to the Heckscher-Ohlin model, which good will China export? Which good will the United States export? In the United States, what will happen to the price of labor (the wage) and to the price of capital?

Producers in import-competing industries often make the following argument: "Other countries have an advantage in production of certain goods purely because workers abroad are paid lower wages. In fact, American workers are much more productive than foreign workers. So import-competing industries need to be protected." Is this a valid argument? Explain your answer.

The United States is highly protective of its agricultural industry, imposing import tariffs, and sometimes quotas, on imports of agricultural goods. This chapter presented three arguments for trade protection. For each argument, discuss whether it is a valid justification for trade protection of U.S. agricultural products.

Since 2000 , the value of U.S. imports of men's and boy's apparel from China has more than tripled. What prediction does the Heckscher-Ohlin model make about the wages received by labor in China?
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