教程国际济理论week3 lecture.pptx

FactorAvailabilityFactorProportionsWeek3

2IncreasingMC: Increasingamountsofotherproductsmust begivenuptoobtaineachextraunitofthe expandingoutputBowed-outPPC(seeFig.3.1)

3InternationalEquilibriumwithIncreasingCostsNextwewillextendtheclassicalmodeloftradetothemoregeneralcaseofincreasingopportunitycostsandintroducedemandbymeansofsocialindifferencecurvesIncreasingOpportunityCostFoodClothingPPFIndifferenceMapandConsumerEquilibriumFoodClothingI’’I’I’’’a)Productspecificfactors.b)Differentindustriesusefactorsindifferentproportions.

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6ReasonsforbowedoutPPC:DifferentproductsrequiredifferentproportionsofresourcesCountrieshavedifferentrelativefactorendowments(less/moresuitable)

7pletespecialisationQ: Whatproductioncombinationischosen?A: Dependsonthemarketpriceratio(seeFig.3.2)Optimum? MC=P atangencybetweenthePPCandPline theslopeofpriceline=marketPratio)

8CommunityIndifferenceCurves(ICs)RepresentdemandsidefortheproductsICsindicatelevelsofutility,well-being,happiness(seeFig.3.3)ICshowsthevariouscombinationsofconsumptionquantities(wheatandcloth)thatleadtothesamelevelofwell-beingorhappiness.ConsumersareindifferentaboutdifferentpointsofthesameICcurvesastheyofferthesamelevelofwell-being.Optimum?atangencyofacommunityIC(CIC)withthePPC(seeFig.3.4)

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Whentradeoccurs(no-tradepricesbetweencountriesdiffer)?apointoftangencybetweenaCICandthenewpriceline(theslope=theequilibriumworldprice)?optimum(seeFig.3.5,top)11

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13Theright-angletrianglebetweentheproductionpointandtheconsumptionpointisatradetriangleshowingexportandimportquantitiesforeachcountryTradepatternsaredeterminedbyproduction-sidedifferences?Pratiodifferences?theskewnessinPPCtowardsspecialisationinproduction(CA)?Xs

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15Gainsfromtrade:Eachcountry