chapter02 factor availability and factor proportion are key（课件）- 《国际贸易(英文版) 》同步教学（人民大学版）

Chapter Two Trade: Factor Availability and Factor Proportions Are Key 2024/1/20 1 Theory and Policy of International Trade 2.1 Production with Increasing Marginal Cost Ricardo’s approach is the assumption of constant marginal opportunity costs. Many industries incur rising, rather than constant, marginal opportunity costs. 2024/1/20 2 Theory and Policy of International Trade 2.1 Production with Increasing Marginal Cost In the standard modern theory of international trade, economists replace the constant-cost assumption used in the Ricardian approach with a more realistic assumption about marginal costs. 2024/1/20 3 Theory and Policy of International Trade 2.1 Production with Increasing Marginal Cost They assume increasing marginal costs: As one industry expands at the expense of others, amounts of the other products given up to get each extra unit of the expanding industry’s product is increasing. 2024/1/20 4 Theory and Policy of International Trade 2.1 Production with Increasing Marginal Cost There are several kinds of factors inputs (land, skilled labor, unskilled labor, capital, and so forth). Different products use factor inputs in different proportions. 2024/1/20 5 Theory and Policy of International Trade 2.1 Production with Increasing Marginal Cost Giving up a unit of wheat production will release relative more land and relative less labor, and increases the production of cloth. However, as more and more resources, mainly land, are released from wheat production and transferred to cloth production, the extra gain in cloth production caused by each extra unit of lost wheat production will decline. 2024/1/20 6 Theory and Policy of International Trade 2.1.1 What Shape Is the PPC? Production-possibility curve (ppc) shows the combinations of amounts of different products that a country can produce, given the country’s available factor resources and maximum feasible productivities.