国际经济学ch03-精品·公开课件.pptVIP

Carbaugh, Chap. 3 International EconomicsBy Robert J. Carbaugh9th Edition Chapter 3: International Equilibrium Indifference curves Final pattern of trade depends not just on supply, but also on demand - which is determined by income individual tastes Discussion of income as a determinant of demand is undertaken in chapter 4. here we consider the role of personal tastes and preferences in demand analysis. Tastes can be shown graphically with indifference curves, which show the various combinations of two goods that give a consumer the same total level of satisfaction. A consumer’s indifference map Features of Indifference curves 1 Indifference curves have a negative slope Keeping satisfaction constant means giving up some of one good for more of another Indifference curves are convex As the consumer gets more of one good, she is less willing to give up what is left of the other The rate of substituting one good for another is shown by the slope of the curve, the marginal rate of substitution Features of Indifference curves (2) “Higher” indifference curves (those farther from the origin) represent greater levels of satisfaction any point on a higher indifference curve suggests at least the same amount of one commodity plus more of another commodity. Equilibrium in the absence of trade We have discussed on the side of producer whose purpose is to maximize the profits. The optimal production point is the point on which the relative price is equal to the opportunity costs. To consumer, their target is to maximize satisfaction, it will attempt to consume some combination of goods on the highest indifference curve that it can reach. A nation in the absence of trade will maximize satisfaction if it can reach the highest attainable indifference curve, given the production constraint of its PPF. This will occur when the production possibilities schedule is tangent to an indifference curve. Indifference curves and int’l. trade A restatement: basis for trade, gains from