国贸理论与政策Classic trade theoryPPT.ppt

* A case of opportunity cost The OC of cloth: U.K.: 0.5/1=1/2= aLC /aLW = PC / PW U.S.: 1/0.8=1.25/1= a*LC / a*LW = P*C / P*W Because aLC /aLW a*LC / a*LW , so U.K. has a comparative advantage in cloth, and will export it to U.S. in exchange for wheat. Cloth (aLC) Wheat (aLW) U.K. 1.0 2.0 U.S. 1.25 1.0 * (50) L/aLW (100)L/aLC U.K.’s Production Possibility Frontier Absolute value of slope equals opportunity cost of cloth in terms of wheat F P wheat, QW cloth, QC, * F* P* (100)L*/a*LW (80)L*/a*LC Wheat, Q*W Cloth, Q*C +1 U.S.’s Production Possibility Frontier * Comparative Advantage Example 2 A B S 3 12 T 6 8 A has absolute advantage in both goods. B has no absolute advantage in either. A’s greatest advantage is in S. B’s least disadvantage is in T. A has CA in S. B has CA in T. * A specializes in S and B specializes in T. A B World S +2 -1 +1 T -1 +1.5 +0.5 World production increases in both goods. * Example 3 A B S 3 12 T 6 36 In this case, B has CA in __. In Example 2, B has CA in __. * Example 4 A B S 3 12 T 6 24 No comparative advantage, No gain from trade, No trade. * Wages and the Relative Price Prices and Wages Price = unit production cost (why?) The same wage rate prevails in both industries. : The RP = the ratio of ULR. * Comparative advantage A has CA in S if (3/12 6/8 in our Example 2). This is equivalent to (3/6 12/8). Or S is relatively cheaper in A than in B. * General Equilibrium in Autarky Example 2 A B S 3 12 T 6 8 Assume the labor supply = 12,000 hours (a year). Draw the PPF for A. The slope? The RP of S? S 4000 2000 T * Draw the PPF for B assuming that its labor supply = 9600. Maximum S = 800 Maximum T = 1200 The slope = 3/2 * Figure 3.01 Production possibility frontiers: (a) country A; (b) country B * Figure 3.02 Pre-trade equilibriums: (a) country A; (b) country B * International trade equilibrium RP = 1/2 in A RP