《西方经济学》双语课件ch09-International Trade.ppt

In this chapter, look for the answers to these questions: What determines how much of a good a country will import or export? Who benefits from trade? Who does trade harm? Do the gains outweigh the losses? If policymakers restrict imports, who benefits? Who is harmed? Do the gains of the policy outweigh the losses? What are some common arguments for restricting trade? Do they have merit? Introduction Recall from Chapter 3: A country has a comparative advantage in a good if it produces the good at lower opportunity cost than other countries. Countries can gain from trade if each exports the goods in which it has a comparative advantage. Now we apply the tools of welfare economics to see where these gains come from and who gets them. The World Price and Comparative Advantage PW = the world price of a good, the price that prevails in world markets PD = domestic price without trade If PD PW, country has comparative advantage in the good under free trade, country exports the good If PD PW, country does not have comparative advantage under free trade, country imports the good The Small Economy Assumption A small economy is a price taker in world markets: Its actions have no affect on PW. Not always true – especially for the U.S. – but simplifies the analysis without changing its lessons. When a small economy engages in free trade,PW is the only relevant price: No seller would accept less than PW, because she could sell the good for PW in world markets. No buyer would pay more than PW, because he could buy the good for PW in world markets. A Country That Exports Soybeans Without trade, PD = $4 Q = 500 PW = $6 Under free trade, domestic consumers demand 300 domestic producers supply 750 exports = 450 A Country That Exports Soybeans Without trade, CS = A + B PS = C Total surplus = A + B + C With trade, CS = A PS = B + C + D Total surplus = A + B + C + D A C T I V E L E A R N I N G 1: Analysis of trade Without trade