Key Questions About International Trade
Which in each country, who are the gainers and losers from opening trade ?
How does trade effect production and consumption in each country ?
Which country gain from trade ?
Why do countries trade? More precisely, what determines which productsa country export and which products it import ?
Trade Usually Results from The Interaction of Competitive Demand and Supply.
Demand
Supply
What are the factors influencing the demand ?
What are the factors influencing the supply ?
Supply Demand
Demand
Demand
Demand
Supply
Supply
What will happenif the demandand supply are unmatched ?
The Effects of Trade on Production, Consumption, and Price, Shown with Demand and Supply Curves
Pre-tradePrice
World Pricewith Trade
ImportsPre-trade Price
World Pricewith Trade
ExportsSf
Df
Sx
Dx
The Effects of Trade on Well-Being of Producers, Consumers, and the Nation as a Whole
Which one better ?
Which Country Gain More ?
Dx
Sx Sx = Represent
Exporting Country
Dx = Represent Importing Country
Consumer Surplus
Producer Surplus
Country Pre-trade Price
Free Trade Price
Price Change(percent)
U.S.(Importer)
2,000 1,000 100%
The Rest ofthe World(Exporter)
700 1,000 30%
Gain More