Bài giảng MicroEconomics - Chapter 037 International Trade

InternationalTradeChapter 37McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.Chapter ObjectivesComparative advantage and the gains from tradeExports and importsEconomic effects of tariffs and quotasArguments for protectionism37-2Some Key FactsU.S. trade deficit in goods $815 billion in 2007U.S. trade surplus in services $107 billion in 2007Canada largest U.S. trade partnerTrade deficit with China$257 billion in 2007Exports are 12% U.S. outputDependence on oil37-3World ExportsGermanyUnited StatesChinaJapanFranceNetherlandsUnited KingdomItaly0 2 4 6 8 10 129.208.598.025.384.063.833.713.40Source: World Trade OrganizationPercentage Share of World Exports, Selected Nations, 200737-4Economic Basis for TradeNations have different resource endowmentsLabor-intensive goodsLand-intensive goodsCapital-intensive goods37-5Comparative AdvantageAssumptionsTwo nationsSame size labor forceConstant costs in each countryDifferent costs across countriesU.S. absolute advantage in bothOpportunity cost ratioSlope of the curveCoffee sacrificed per ton of wheat37-6Coffee (Tons)30252015105035404551015202530Wheat (Tons)Coffee (Tons)3025201510503540455101520Wheat (Tons)(a) United States(b) Brazil121884ABComparative Advantage37-7Self-sufficiency output mixSpecialization and tradeProduce good with lowest domestic opportunity costOpportunity cost 1 ton wheat1 pound of coffee in U.S.2 pounds of coffee in BrazilComparative Advantage37-8Terms of tradeU.S. 1W = 1CU.S. will sell 1W for more than 1CBrazil 1W = 2CBrazil will pay less than 2C for 1WSettle between the twoDepends on supply/demand factorsAssume 1W = 1.5CComparative Advantage37-9Gains from tradeTrade possibilities lineSlope equals terms of tradeImproved optionsComplete specializationMore of both goodsMore efficient resource allocationComparative Advantage37-10Economic Basis for TradeCoffee (Tons)30252015105035404551015202530Wheat (Tons)Coffee (Tons)3025201510503540455101520Wheat (Tons)(a) United States(b) Brazil121884ABA’B’CC’Wcww’TradingPossibilities LineTradingPossibilities Line37-11Comparative AdvantageTrade with increasing costsConcave production curveResources not perfectly substitutable Incomplete specializationThe case for free tradePromote efficiencyPromote competition37-12Supply and Demand Analysis World priceDomestic price with no tradeWorld price > domestic priceExport surplusExport supply curveWorld price < domestic priceImport shortageImport supply curve37-13Price (Per Pound; U.S. Dollars1.501.251.00.75.5005075100125150Quantity of Aluminum(Millions of Pounds)1.501.251.00.75.50050100Quantity of Aluminum(Millions of Pounds)Price (Per Pound; U.S. Dollars U.S. Domestic Aluminum Market(b) U.S. Export Supply and Import DemandDdSdU.S.ExportSupplyU.S.ImportDemandabcxySurplus = 50Surplus = 100Shortage = 50Shortage = 100Supply and Demand Analysis 37-14Supply and Demand AnalysisPrice (Per Pound; U.S. Dollars1.501.251.00.75.5005075100125150Quantity of Aluminum(Millions of Pounds)1.501.251.00.75.50050100Quantity of Aluminum(Millions of Pounds)Price (Per Pound; U.S. Dollars Canada’s Domestic Aluminum Market(b) Canada’s Export Supply and Import DemandDdSdCanadianExportSupplyCanadianImportDemandqrstSurplus = 50Surplus = 100Shortage = 5037-15International Equilibrium1.00.75.88050100Quantity of Aluminum(Millions of Pounds)Price (Per Pound; U.S. DollarsImport demand = Export supplyCanadianExportSupplyCanadianImport DemandeU.S.ExportSupplyU.S.ImportDemandEquilibrium37-16Trade BarriersTariffsRevenue tariffProtective tariffImport quotaNontariff barrier (NTB)Voluntary export restriction (VER)37-17Trade BarriersEconomic impact of tariffsDirect effectsDecline in domestic consumptionIncrease in domestic productionDecline in importsTariff revenueIndirect effects37-18Trade BarriersQuantityPrice0DdSdPdqSd + QPtPwabcdEconomic Effects of a Tariff or Quota37-19The Case for ProtectionDifferent argumentsMilitary self-sufficiencyDiversification for stabilityInfant industry Protection against dumpingIncreased domestic employmentCheap foreign labor37-20The WTO ProtestsWorld Trade Organization has 151 member nationsLiberalize trade through negotiationProtest groupsLabor unions, environmentalists, socialists, anarchistsKey issues for the protestorsLabor protection and environmental standards37-21Key Termslabor-intensive goodsland-intensive goodscapital-intensive goodsopportunity-cost ratioprinciple of comparative advantageterms of tradetrading possibilities linegains from tradeworld pricedomestic priceexport supply curveimport demand curveequilibrium world pricetariffsrevenue tariffprotective tariffimport quotanontariff barrier (NTB)voluntary export restriction (VER)strategic trade policydumpingSmoot-Hawley Tariff ActWorld Trade Organization (WTO)Doha Round37-22Next Chapter PreviewThe Balance of Payments, Exchange Rates, and Trade Deficits37-23