托马斯.A.普格尔_国际贸易_英语chap004.ppt

McGraw-Hill/Irwin ? 2007 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin ? 2007 The McGraw-Hill Companies, Inc., All Rights Reserved. Chapter 4 Trade：Factor Availability and Factor Proportions Are Key PRODUCTION WITH INCREASING MARGINAL COSTS increasing marginal costs and the production-possibility curve What production possibilities curve look like under Increasing marginal costs? Increasing marginal cost: as one industry expands its production quantity, increasing amounts of other products must be given up to get each extra unit of the expanding industrys product Is it straight line as constant cost ? Figure 4.1 - Production Possibilities under Increasing Costs What production combination is actually chosen? Specialization on only one product in constant cost case. It depends on the market price. Will it specialize on only one product under increasing marginal cost? Community indifference curves Indifference curves: A schedule or curve that shows the various combinations of consumption quantities of products that give a consumer the same level of well-being or happiness. What consumption combination is actually chosen? Depend on the budget constrain: income and prices Figure 4.2 – Indifference Curves Relating an Individual’s Utility Levels to Consumption of Two Goods PRODUCTION AND CONSUMPTION TOGETHER Without trade With trade The gains from trade Figure 4.3 – Indifference Curves and Production Possibilities without Trade Figure 4.4 – Two Views of Free Trade and Its Effects The gains from trade Can you tell the gains of trade for both countries from figure 4.4? The gains from trade Trade allows each country to consume at a point(C1)that lies beyond its own possibility to produce; trade allows each country to achieve a higher community indifference curve A country gains more from trade if its terms of trade increase. Terms of trade: the ratio of the (average) price that a country receives from foreigners for its exports to the