Gains From Trade

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Gains From Trade

• The Duality Approach

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1. Autarky
v vector of factor supply x vector of
outputs cvector of consumption pvector of
final goods prices
u level of utility
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2. Trade
Note
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3. Gains From Trade
By the minimizing property of the expenditure
function
By the definition of autarky equilibrium
By the maximizing property of the revenue
function
By the income-expenditure equality