Export and Import Curves

1
Export and Import Curves

• Econ 303
• International Economics
• Prof. Carlos A. Benito

2
Our looking glass - Integrating

• Narrative, stories, about free trade
• Meanings and values about trade
• Models and theories about free trade
• Explaining trade
• Debates about Trade policies
• The bridge between values and explanations
• Making explicit values and meanings
• Analyzing trade policies

3
Analyzing Free Trade

• Why do countries trade? What determine the
  pattern of trade?
• How does trade affect production and consumption
  in each country?
• What are the gains (and losses) for a country as
  a whole from trading?
• What are the effects of trade on different groups
  in a country. Are there groups that gain and
  other that lose?

4
Export supply Import DemandDetermination
Canada
International Market
Mexico
P
P
P
S
S
D
D
T
Q
Q
5
International price determinationIts effects on
consumption, production and trade
Canada
International Market
Mexico
P
P
P
S
S
X
M
D
D
T
Q
Q
6
International price determinationAn Alternative
Model
Canada
Global Market
Mexico
P
P
P
S
S
D
D
T
Q
Q
7
Consumer and Producer Surplus
consumer surplus
Canada
International Market
Mexico
P
P
P
S
producer surplus
S
X
M
D
D
T
Q
Q
8
International TradeIts effects on economic
welfare
Canada
International Market
Mexico
After trade
P
P
P
S
After Trade
Before trade
Before trade
S
X
Gains from trade
M
D
D
T
Q
Q
Gains from trade
9
Economics of Little Triangles
Canada
International Market
Mexico
Before trade
Gains from trade
After trade
10
Export Elasticity
11
Import Elasticity