国际经济学Chap002.pptVIP

Trading Under Constant-Cost Conditions Distributing the gains from trade Domestic cost conditions (Figure 2.2) Domestic cost ratios set the outer equilibrium terms of trade Domestic cost-ratio line: The no-trade boundary International terms of trade has to be better than or equal to the rate defined by domestic price line Region of mutually beneficial trade is bounded by cost ratios Continued Back Trading Under Constant-Cost Conditions Equilibrium terms of trade Mill’s theory of reciprocal demand Within the outer limits of the terms of trade, the actual terms of trade is determined by the rela