CH4_economies of scale 国际贸易理论政策与 及应用英文版本课件.pptVIP

* Economies of Scale and TradeModule 4 Module Objectives To explain the scale economies To explain trade that is not based on the standard assumptions Patterns of Trade of US Inter- versus Intra-Industry Trade How to explain intra-industry trade? A country exports and imports goods of the same industry Can difference in labor cost and factor endowments explain intra-industry trade? Inter-industry trade a country exports goods in some industries and imports goods in other industries. Scale Economies and Monopolistic Competition Consider differentiated product - products that are seemingly the same good but that are perceived by consumer to have real or imagined difference consumers value varieties monopolistic competition - a producer has a monopolistic power on his brand; but compete with other brands scale economies - size of the firm increases reduces the cost of production (two types of scale economies) Gains From Trade If U.S. and UK can trade with each other, consider the following two situations: U.S. uses 35 labors produce cheap car and UK uses 35 labors produce expensive car = how many cheap and expensive cars total? Gains From Trade, Again U.S. uses 35 labors produce expensive car and UK uses 35 labors produce cheap car = how many cheap and expensive cars total? Why Trade Benefits? With economies of scale and product differentiation, nations with similar characteristics will still trade with each other to explore the scale of the market to satisfy the diversified needs of consumer Scale Economies and Monopolistic Competition How to describe the pattern of trade? Japan - capital abundant Canada - land abundant Two goods: manufacturing (capital intensive) and food (land intensive) differentiated products in manufacturing with increasing returns to scale Patterns of Trade Canada Japan Food Manufacturing products What If Market Sizes Differ? If nations have different sizes of markets and trade has to incur transportation costs, what kind of pattern of tra