part3–市场和福利ch09–应用︰国际贸易.pptVIP

* Trade benefits soybean producers because they can sell at a higher price. Producer surplus rises by the area B + D. Trade makes domestic buyers worse off because they have to pay a higher price. Consumer surplus falls by the area B. The gains to producers are greater than the losses to consumers, so trade increases total welfare: total surplus rises by the amount D. * This and the following slide cover the same material in Active Learning Exercise 1. I provide these slides in case you wish to lecture on this material instead of having students work the exercise. To do this, simply delete the three orange and yellow slides titled “Active Learning 1” and replace them with this and the following slide. Then, “unhide” these slides by unselecting “Hide Slide” from the “Slide Show” drop-down menu. In this case, PD PW, so this country will import plasma TV sets from abroad. The quantity of imports is simply the difference between the quantity demanded by domestic consumers and the quantity supplied by domestic firms at the world price. * Trade benefits consumers in this case, because it allows them to buy plasma TVs at lower prices, so more consumers can afford plasma TVs if imports are allowed. The gains to consumers appear on the graph as the area (B+D), which represents the increase in consumer surplus when the country allows trade. In this example, trade harms domestic producers, because they now must sell their plasma TVs at a lower price. As a result, they produce a smaller quantity, earn less revenue, and likely let go of some of their workers. These losses are represented on the graph by the area B , which represents the fall in producer surplus resulting from trade. As the graph shows, the gains to consumers outweigh the losses to producers, as total surplus increases by the amount D, which represents the gains from trade in plasma TV sets. * In December 2005, thousands of protestors gathered outside the meeting place of the Wo