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.