Chapter Organization Introduction A Standard Model of Trading Economy International Transfers of Income: Shifting the RD Curve Tariffs and Export Subsidies: Simultaneous Shifts in RS and RD Summary Appendix: Representing International Equilibrium with Offer Curves Copyright2003 Pearson Education,inc
Chapter Organization Introduction A Model of a Two-Factor Economy Effects of International Trade between Two-Factor Economies Empirical evidence on the Heckscher-Ohlin Model Summary Appendix: Factor Prices, Goods Prices, and Input Choices
Imperfect Competition Imperfect competition refers to those market structures that fall between perfect competition and pure monopoly. Imperfect competition includes industries in which firms have competitors but do not face so much competition that they are price takers
Monopoly While a competitive firm is a price taker, amonopoly firm is a price maker. A firm is considered a monopoly if . . . – it is the sole seller of its product. – its product does not have close substitutes
The Law of Supply Firms are willing to produce and sell agreater quantity of a good when the priceof the good is higher. This results in a supply curve that slopesupward
“The best things in life are free. . .” Free goods provide a special challenge foreconomic analysis Most goods in our economy are allocatedin markets… for these goods, prices are the signalsthat guide the decisions of buyers andsellers
