国际经济学-克鲁格曼英文版课件-nobel08ch05.pptVIP

Chapter 5 The Standard Trade Model Preview Measuring the values of production and consumption Welfare and terms of trade Effects of economic growth Effects of international transfers of income Effects of import tariffs and export subsidies Income distribution Introduction The standard trade model combines ideas from the Ricardian model and the Heckscher-Ohlin model. Differences in labor services, labor skills, physical capital, land, and technology between countries cause productive differences, leading to gains from trade. These productive differences are represented as differences in production possibility frontiers, which represent the productive capacities of nations. A country’s PPF determines its relative supply function. National relative supply functions determine world a relative supply function, which along with world relative demand determines an equilibrium under international trade. The Value of Production Recall that when the economy maximizes its production possibilities, the value of output V lies on the PPF. V = PCQC + PF QF describes the value of output in a two good model, and when this value is constant the equation’s line is called and isovalue line. The slope of the isovalue line equals – (PC /PF), and if relative prices change the slope changes. Fig. 5-1: Relative Prices Determine the Economy’s Output Fig. 5-2: How an Increase in the Relative Price of Cloth Affects Relative Supply The Value of Consumption The value of the economy’s consumption is constrained to equal the value of the economy’s production. PC DC + PF DF = PC QC + PF QF = V Production choices are determined by the economy’s PPF and the prices of output. What determines consumption choices (demand)? The Value of Consumption (cont.) Consumer preferences and prices determine consumption choices. Consumer preferences are represented by indifference curves: combinations of goods that make consumers equally satisfied (indifferent). Each consumer has his or her own preferences, but