slide 2-1copyright © 2003 pearson education, inc. 解釋 rd' q'q' 2 解釋 解釋 rd...
DESCRIPTION
Slide 2-3Copyright © 2003 Pearson Education, Inc. determining the relative price after trade -- 1 The equilibrium relative price of cheese is determined by the intersection of the relative supply and relative demand curves. When the relative price of cheese is between the two countries’ pretrade prices, each country will specialize in the production of the good in which it has a comparative advantage. H produces only cheese, F only wine. (point 1) 回圖形 回圖形TRANSCRIPT
Slide 2-1Copyright © 2003 Pearson Education, Inc.
解釋
RD'
Q'
2 解釋 RD 解釋
1 解釋
aLC/aLW
a*LC/a*
LW RS 解釋
Figure 2-3: World Relative Supply and Demand
Trade in a One-Factor World
Relative priceof cheese, PC/PW
Relative quantityof cheese, QC + Q*
C
QW + Q*W
L/aLC
L*/a*LW解釋 均衡
6/3=2解釋
1/2解釋
Slide 2-5Copyright © 2003 Pearson Education, Inc.
Trade in a One-Factor World
The Pattern of trade • It therefore remains true that if acountry does
specialize, it will do so in the good in which it has a comparative advantage. 回相對價格 ; 回圖形
The relative price after trade• if neither country produces both goods, we must have
PC
PW
aLCa
Lw
aLC *
aLw *< <
Slide 2-6Copyright © 2003 Pearson Education, Inc.
Why a country’s production pattern is determined by comparative advantage?• Relative Wages
– Because there are technological differences between the two countries, trade in goods does not make the wages equal across the two countries.
– The wage rate in Home is PC / aLC . 證明用
– The wage rate in Foreign is PW / aLW* .
Trade in a One-Factor World
Slide 2-7Copyright © 2003 Pearson Education, Inc.
– The relative wage of a country’s workers is the amount they are paid per hour, compared with the amount workers in another country are paid per hour.
– The relative wage of Home workers is
Trade in a One-Factor World
PC / aLC
PW / aLW*
PC
PW
aLw *
aLC
= .
Slide 2-8Copyright © 2003 Pearson Education, Inc.
• According to relative price after trade: –
–
–
Trade in a One-Factor World
aLW*
aLC
aLW*
aLC
aLC
aLW<
PC
PW<
aLC*
aLW*
aLW*
aLC
aLW*
aLW<
PC / aLC
Pw / aLw* <
aLC*
aLC
1 / aLW
1/ aLW* <
PC / aLC
Pw / aLw*
(3/2) (6)
<1 / aLC
1/ aLC*
說明 1
說明 2
舉例
(3) 說明
Slide 2-10Copyright © 2003 Pearson Education, Inc.
relative wage -- 2
• The relative wage lies between the ratios of the two countries’ productivities in the two industries, so each country ends up with a cost advantage in one good.
– Because of its lower wage rate, F has a cost advantage in wine, even though it has lower productivity.
– The country with the higher absolute advantage will enjoy a higher wage after trade.