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Overview
This chapter indicates why we study theories of international trade and presents the basic theory using supply and demand curves. Trade is important to individual consumers, to workers and other factor owners, to firms, and therefore to the whole economy. The box “Trade Is Important” provides useful data about the types of products traded and the increasing role of trade in national economies.
Trade is also contentious, with perpetual battles over government policies toward trade. To understand the controversy, we need to develop theories of why people trade as they do.
It is useful to organize the analysis of international trade by contrasting a world of no trade with a world of free trade, leaving analysis of intermediate cases (e.g., non-prohibitive tariffs) for Part Two. The analysis seeks to answer four key questions about international trade:
1. Why do countries trade? What determines the pattern of trade?
2. How does trade affect production and consumption in each country? 3. What are the gains (or losses) for a country as a whole from trading?
4. What are the effects of trade on different groups in a country? Are there groups that gain and other groups that lose?
Theories of international trade provide answers to these four questions.
Basic demand and supply analysis can be used to provide early answers to these four questions, as well as to introduce concepts that can be used in more elaborate theories. Using motorbikes as an example, the chapter first reviews the basic analysis of both demand (the demand curve and the role of the product’s price, other influences on quantity demanded, movements along the demand curve and shifts in the demand curve, and the price elasticity of demand as a measure of responsiveness) and supply (the supply curve, the role of marginal cost, other influences on
quantity supplied, movements along the supply curve and shifts in the supply curve, and the price elasticity of supply). It pays special attention to the meaning and measurement of consumer surplus and producer surplus. This section, which focuses on review and development of basic tools, ends with the picture of market equilibrium in a national market with no trade as the intersection of the domestic demand curve and the domestic supply curve.
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发表于 2016-10-31 14:35:20
发表于 2018-3-29 21:29:56
