克鲁格曼《国际经济学》讲义CH05课件.ppt

Chapter 5;Chapter Organization;Introduction;;A Standard Model of a Trading Economy;A Standard Model of a Trading Economy;Figure 5-1: Relative Prices Determine the Economy’s Output;Figure 5-2: How an Increase in the Relative Price of Cloth Affects Relative Supply;Relative Prices and Demand The value of an economys consumption equals the value of its production: PCQC + PFQF = PCDC + PFDF = V The economy’s choice of a point on the isovalue line depends on the tastes of its consumers, which can be represented graphically by a series of indifference curves.;Indifference curves Each traces a set of combinations of cloth (C) and food (F) consumption that leave the individual equally well off They have three properties: Downward sloping The farther up and to the right each lies, the higher the level of welfare to which it corresponds Each gets flatter as we move to the right ;TT;If the relative price of cloth, PC/PF , increases, the economy’s consumption choice shifts from D1 to D2. The move from D1 to D2 reflects two effects: Income effect Substitution effect It is possible that the income effect will be so strong that when PC/PF rises, consumption of both goods actually rises, while the ratio of cloth consumption to food consumption falls.;TT;The Welfare Effect of Changes in the Terms of Trade Terms of trade The price of the good a country initially exports divided by the price of the good it initially imports. A rise in the terms of trade increases a country’s welfare, while a decline in the terms of trade reduces its welfare.;Determining Relative Prices Suppose that the world economy consists of two countries: Home (which exports cloth) Its terms of trade are measured by PC/PF Its quantities of cloth and food produced are QC and QF Foreign (which exports food) Its terms of trade are measured by PF/PC Its quantities of cloth and food produced are Q*C and Q*F ;To determine PC/PF , one must find the intersection of world relative supply of cloth and world rela