国际经济学-第三章节.pptVIP

Ch.3 The Standard Theory of Int’l Trade 3.1 Introduction A PPF with increasing opportunity costs will be introduced; Tastes or demand preferences are introduced with community indifference curves; How supply and demand determine the eq’bm relative good price in each nation in the absence of trade; To find the basis for and the gains from trade; To show how mutually beneficial trade is possible even when 2 nations are exactly alike except for tastes under increasing cost conditions 3.2 The production frontier with increasing cost 1) Increasing opportunity costs: the nation must give up more and more of one good to release just enough resources to produce each additional unit of another good. Increasing opportunity costs result in a production frontier that is concave from the origin(rather than a straight line). 3.2a illustration of increasing cost: p60 f3-1 The PPFs that are concave from the origin reflect the fact that each nation incurs increasing opportunity cost in the production of both goods 3.2b The Marginal Rate of Transformation Definition:the MRT of X for Y refers to the amount of Y that a nation must give up to produce each additional unit of X. MRT=opportunity cost =the slope of PPF p61 f3-1 A movement from point A to point B along the PPF of N1 involves an increase in the slope (MRT), and reflects the increasing opportunity cost in producing more X 3.2c Reasons for increasing opportunity cost and different PPFs How do increasing opportunity costs arise? Why are they more realistic? 1)Factors of production are not homogeneous 2)Factors of production are not used in same fixed proportion or intensity in the production of all goods. Read the example in p.62 Reasons for the different PPFs (in N1 , N2 ) The two nations have different factor endowments or use different technologies in production. 3.3 Community indifference curves (demand preference) 3.3a Illustration of CICs A CIC shows the various combinations of two goods that yield equal satisfact