Below you find examples of exam questions.

Short questions

1) Which stylized facts the Krugman model fails to explains and why?2) Which is the driver of trade in Ricardian model?3) Consider a trade model à la Melitz. Why exporting firms are larger than non-exprting firms?4) Why low contract enforcement in a country may reduce its imports?5) “In a world of incomplete contracts and trade in intermediate inputs, the socially optimal

trade policy is a tariff on import of intermediate goods.” True or false? Explain.6) Which kind of imperfections on capital markets can explain the presence of multinational

firms?7) In the contest of Antras and Helpman (2004) paper on global sourcing, how can we interpret

the expression below?

β∗¿1−β∗¿

=(∂R j∂ h j

h jR j )(

∂ h jββh j )

−(∂R j∂m j

m jR j )(

∂m j∂ β

βm j )

≥0 ¿¿

Long questions

1) Consider a model of global sourcing as in Antras and Helpman (2004). Discuss the location and organization choice of a firm operating in a m-intensive industry. How partial contractability would affect your conclusions?

2) Discuss the choice export vs. invest abroad by means of a model à la Melitz with heterogenous firms. How RTA may affect the choice?