2.Foundations of modern trade theory.pptx

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1、Part I. Export and Import,II.Foundations of modern trade theory: comparative advantage【比较优势】,Last time we talked about the concept of international trade and specialization. To fully understand the benefits of trade, we need to show you an economic graph（经济图表）. Now this is the first graph youll see

2、in an economics textbook. Its called the production possibilities frontier, or PPF(生产可能性边界）. The PPF shows the different combination of two goods being produced using all resources efficiently. Now heres a made-up example.,If the United States uses all of its workers and factories to produce airplan

3、es, it can produce 500 per day, but it cant produce any shoes. Now if they use all their resources to produce shoes, they can produce 1000 tons per day, but they cant produce any planes. Now because the United States has limited resources, they cant produce any combination beyond the production poss

4、ibilities frontier. So its impossible to produce 500 planes and 1000 tons of shoes.,Lecture Time,Now what if American companies mismanage their resources and try to produce shoes in plane factories and planes in shoe factories? Well, theyd be at a point inside the production possibilities frontier,

5、showing an inefficient use of resources. So every possible combination inside the curve is inefficient and on the curve is efficient, and outside the curve is impossible. Now lets compare this PPF to Chinese. China can produce 100 planes per day or 800 tons of shoes. Since the United States can prod

6、uce more planes than China, they have an absolute advantage in the production of planes. The US also has an absolute advantage in the production of shoes. Since the US can produce more of both goods, you might think there is no reason to trade. Well, no.,Specialization and trade makes people and in

7、this case countries, better off. Lets calculate the opportunity cost for the US to produce one plane. Every single time they produce an additional plane, it costs them two tons of shoes. China, on the other hand, gives up 8 tons of shoes for each plane they produce. And since the US has a lower oppo

8、rtunity cost, they have whats called a comparative advantage. China has a comparative advantage in the production of shoes. But heres the best part.,If the US specialized in planes, they can import shoes from China at a lower opportunity cost than if they produce shoes themselves. For example, if th

9、ese two countries make a deal to trade one plane for four tons of shoes, the US would be better off. They would rather get four tons of shoes per plane from China than only get two tons per plane by making shoes on their own. Now China is also better off. They would rather trade four tons of shoes f

10、or a plane than give up 8 tons of shoes for producing a plane on their own. Individuals and country should specialize in producing things in which they have a comparative advantage and then trade with other countries that specialize in something else. This trade is mutually beneficial. Now thats the

11、 production possibilities frontier.,Test Time,Now its your turn to practice some of the words and concepts we studied in this episode 1.What is PPF? Its called the production possibilities frontier, or PPF(生产可能性边界）. The PPF shows the different combination of two goods being produced using all resour

12、ces efficiently. 2.What is the biggest comparative advantage of China? cheap labor market,Ending,No country in recent decades has achieved sustained improvements in living standard without open trade with the rest of the world. Specialization and trade makes the world better off. Next time well show you the process of international trade and practice the terminology in it. 有缘学习更多+谓ygd3076考证资料,