(出口偏向型增长).pptVIP

Chapter 5 The Standard Trade Models Introduction This chapter presents a general model ,that is “ standard trade model, which can be used to address a wide range of issues. Introduction The Standard Trade Model Production Possibilities and Relative Supply For the purposes of our standard model we assume that each country product two goods, Food (F) and Cloth (C) each country’s production possibility frontier is a smooth curve like that illustrated by TT in left figure Relative Prices and Demand What determines consumption choices (demand)? Consumer preferences and prices determine consumption choices. Consumer preferences are represented by indifference curves —— combinations of goods that make consumers equally satisfied (indifferent). Relative Prices and Demand Relative Prices and Demand A Standard Model of a Trading Economy A higher relative price of cloth will also influence consumption decisions about cloth versus food: a higher relative price of cloth makes consumers willing to buy less cloth and more food, that is showed by the shift along the indifference curve, toward food and away from cloth. Relative Prices and Demand These two effects are familiar from economic theory: The change in welfare (income) when the price of one good changes relative to the price of another is called the income effect. The income effect is represented graphically by shifting the indifference curve. The substitution of one good for another when the price of the good changes relative to the other is called the substitution effect. This substitution effect is represented graphically by a moving along a given indifference curve. Determining Relative Prices To determine the price of cloth relative to the price food in our model, we again use relative supply and relative demand. relative supply considers world supply of cloth relative to that of food at each relative price relative demand considers world demand of cloth relative to that of food at each relative price In a