ECSENOMICS Chapter 15 Comparative Advantage and Protectionism McGraw-Hilllrwin CopyrightC 2001 The McGraw-Hill Companies, Inc. All rights reserved
McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. Chapter 15 Comparative Advantage and Protectionism
ECSENOMICS American Production data 1-108 Figure 15-1 450 Americas production-possibility schedule (1-to-2 constant-cost ratio) 三300 Possibilities Food(units) Clothing(units) A 150 200 2 B 0 300 200 400 600 Food McGraw-Hilllrwin CopyrightC 2001 The McGraw-Hill Companies, Inc. All rights reserved
McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. American Production Data T-108 Figure 15-1
ECSENOMICS Comparative Advantage Illustrated T-109 Figure 15-2 (a) America (b) Europe 450 450 300 150 Before Posttrade 150 Posttrade price line price line Before trade 100 Food Food McGraw-Hilllrwin CopyrightC 2001 The McGraw-Hill Companies, Inc. All rights reserved
McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. Comparative Advantage Illustrated T-109 Figure 15-2
ECSENOMICS America before and after Trade 1-110 Figure 15-3 450 Final price ratio( 2/3) 300 Exported 150 B′(+) Initial price ratio(1/2)B Imported(-) A 200 400 600 Food McGraw-Hilllrwin CopyrightC 2001 The McGraw-Hill Companies, Inc. All rights reserved
McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. America before and after Trade T-110 Figure 15-3
ECSENOMICS Free Trade Allows the World to move to Its Production-Possibility Frontier T-111 igure 15-4 Fi 500 X E(After trade) B ( Before trade) 500 Food McGraw-Hilllrwin CopyrightC 2001 The McGraw-Hill Companies, Inc. All rights reserved
McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. Free Trade Allows the World to Move to Its Production-Possibility Frontier T-111 Figure 15-4
ECSENOMICS With Many Commodities, There Is a C Spectrum of Comparative Advantages 1-112 Figure 15-5 MeriCa Europe’s comparative <h comparative advantage Aircraft Computers Wheat Automobiles Wine Apparel advantage McGraw-Hilllrwin CopyrightC 2001 The McGraw-Hill Companies, Inc. All rights reserved
McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. With Many Commodities, There Is a Spectrum of Comparative Advantages T-112 Figure 15-5
ECSENOMICS Triangular Trade Benefits All 1-113 Figure 15-6 Developing Oil Ja countries America McGraw-Hilllrwin CopyrightC 2001 The McGraw-Hill Companies, Inc. All rights reserved
McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. Triangular Trade Benefits All T-113 Figure 15-6
ECSENOMICS American Production, Imports, and Consumption with Free Trade T-114 Figure 15-7 Domestic supply 5k5E<5aaagE production World supply M Domestic demand Quantity of clothing in America (units) McGraw-Hilllrwin CopyrightC 2001 The McGraw-Hill Companies, Inc. All rights reserved
McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. American Production, Imports, and Consumption with Free Trade T-114 Figure 15-7
ECSENOMICS Effect of a tariff 1-115 Figure 15-8 Domestic demand Domestic supply Domestic production H Domestic S) prie Taril World supply E 100 200 300 Quantity of clothing(units) McGraw-Hilllrwin CopyrightC 2001 The McGraw-Hill Companies, Inc. All rights reserved
McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. Effect of a Tariff T-115 Figure 15-8
ECSENOMICS Economic Cost of a tariff T-116 Figure 15-9 Domestic demand Domestic supply World price plus tariff A World price D 00150 250300 Quantity of clothing (units) McGraw-Hilllrwin CopyrightC 2001 The McGraw-Hill Companies, Inc. All rights reserved
McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. Economic Cost of a Tariff T-116 Figure 15-9
