Those models share s number of features The productive capacity of an economy can be summarized by its production possibility frontier Production possibilities determine a country's relative supply schedule World equilibrium is determined by world relative demand and a world relative supply schedule that lies between the national relative supply schedules a The standard trade model is a general model of trade that admits these models as special cases Copyright C 2003 Pearson Education, Inc Slide 5-4Copyright © 2003 Pearson Education, Inc. Slide 5-4 ▪ Those models share s number of features: • The productive capacity of an economy can be summarized by its production possibility frontier • Production possibilities determine a country’s relative supply schedule • World equilibrium is determined by world relative demand and a world relative supply schedule that lies between the national relative supply schedules. ▪ The standard trade model is a general model of trade that admits these models as special cases