Salvatore
c04.tex
V2 - 10/26/2012
12:58 A.M.
Page 98
98
Demand and Supply, Offer Curves, and the Terms of Trade
A L O O K A H E A D
In Chapter 5, we extend our trade model in order to
identify one of the most important determinants of the dif-
ference in the pretrade-relative commodity prices and the
comparative advantage among nations. This also allows
us to examine the effect that international trade has on the
relative price and income of the various factors of pro-
duction. Our trade model so extended is referred to as the
Heckscher–Ohlin model . In Chapter 6, we present other
more recent trade models.
K E Y T E R M S
Commodity or net
barter terms of
trade,
p. 94
General equilibrium
model, p. 97
Law of reciprocal
demand, p. 104
Offer curves,
p. 89
Reciprocal demand
curves, p. 89
Terms of trade,
p. 94
Trade indifference
curve, p. 100
Q U E S T I O N S F O R R E V I E W
1.
How can the supply curve of exports and the demand
curve of imports of a commodity be derived from the
total demand and supply curves of a commodity in
the two nations?
2.
How is the equilibrium-relative commodity price
with trade determined with demand and supply
curves?
3.
What is the usefulness of offer curves? How are they
related to the trade model of Figure 3.4?
Do'stlaringiz bilan baham: