ch03international equilibrium(國(guó)際經(jīng)濟(jì)學(xué)浙江林學(xué)院,岑麗娟)

1、International EconomicsBy Robert J. Carbaugh8th EditionChapter 3:International EquilibriumIndifference curvesFinal pattern of trade depends not just on supply, but also on demand - which is determined by individual tastesTastes can be shown graphically with indifference curves, which show the variou

2、s combinations of two goods that give a consumer the same total level of satisfactionBringing demand into the model2A consumers indifference mapBringing demand into the model3Indifference curves (contd)Indifference curves have a negative slopeKeeping satisfaction constant means giving up some of one

3、 good for more of another Indifference curves are convexAs the consumer gets more of one good, she is less willing to give up what is left of the otherThe rate of substituting one good for another is shown by the slope of the curve, the marginal rate of substitutionBringing demand into the model4Ind

4、ifference curves (contd)“Higher” indifference curves (those farther from the origin) represent greater levels of satisfactionIndividual preferences cannot really be added up into a “community indifference curve” but it is useful to imagine that they can for the purposes of trade theoryBringing deman

5、d into the model5Indifference curves and intl. tradeBringing demand into the model6Basis for trade, gains from tradeBringing demand into the model7Equilibrium terms-of-trade limitsInternational equilibrium8Immiserizing growthImpact of trade9Offer curves: supply and demandInternational equilibrium10Offer curves: supply and demandInternational equilibrium11Equilibrium terms of tradeIntern