economics krugman wells Chapter4

Economics at work
Diminishing returns are a key factor in explaining why many countries in Asia are so poor. Living standards in crowded China and India are low because there are so many workers per acre of land and not because farmers are ignorant or fail to respond to economic incentives.
translation
规模收益递减发生在所有投入的均衡 增加导致总产出以较小比例增加的时 候。在许多流程中，规模的增加最终 会达到一个极点，超过这一点就会导 致非效率性。这可能是由于管理成本 或控制成本变得庞大而造成的。
5）productivity
Productivity is a concept measuring the ratio of total output to a weighted average of inputs. What would be the effect of a general increase in the scale of economic activity? If increasing returns prevailed, the larger scale of inputs and production would lead to greater productivity. It suggests that increases in a nation’s per capita output and living standards may result in part from exploiting increasing returns to scale in production.

• Intersection of labor and capital constraints occurs at 500 calories of food and 750 yards of cloth (point 3).
Fig. 5-1: The Production Possibility Frontier Without Factor Substitution
Total calories of food production
aLCQC + aLFQF ≤ L
Labor used for required for each calorie of food production
Total amount of labor resources
food aLF = 1, labor used to produce one calorie of food
Production Possibilities (cont.)
• Production possibilities are influenced by both capital and labor:
Production Possibilities (cont.)
• Max food production 1000 (point 1) fully uses capital, with excess labor.
• Max cloth 1000 (point 2) fully uses labor, with excess capital.
• An isovalue line is a line representing a
constant value of production, V:

3. Besides size and distance; culture, geography, multinational corporations, and the existence of borders influence trade.
4. Today, most trade is in manufactured goods, while historically agricultural and mineral products made up most of trade.
➢ 用产品W（酒）来表示的产品C（奶酪） 的相对价格指的是交换一单位奶酪所需 要的酒的数量。
➢ 用 的 资美表 ，元示用价PwCC格奶表。酪示用的奶w美酪W元产表价业示格的酒，美产用元业P工的W资表美示元酒工
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单一要素经济
单一要素经济是完全竞争的，因此没有利润存 在。奶酪部门的小时工资率等于工人每小时的 产值，即PC/aLC。而酒部门工人的小时工资率 则等于PW/aLW
比较优势建立在机会成本的比较之上。如果 一个国家生产某种产品的机会成本较低，则在 这种产品上具有比较优势
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比较优势的概念
■如果每一个国家按照比较优势（较低的机会成 本）进行专业化（specialization）生产，然后 进行贸易，则这种贸易对双方都有好处。
■比较优势是如何决定的？ 对这一问题的回答将帮助我们了解国家间的
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第三章 劳动生产率和比较优势： 李嘉图模型
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本章简介
■ 国家间进行国际贸易出于两个基本原因： 国家之间在气候、土地、资本、劳动以及技术

▪ Assumptions of the Model
• An economy can produce two goods, cloth and food. • The production of these goods requires two inputs
that are in limited supply; labor (L) and land (T).
– Relative factor intensity (refers to goods)
• Is also referred to as the factor-proportions theory
Copyright © 2003 Pearson Education,Inc.
Slide 4-3
A Model of a Two-Factor Economy
▪ The Heckscher-Ohlin theory:
• Emphasizes resource differences as the only source of
trade
• Shows that comparative advantage is influenced by:
– Relative factor abundance (refers to countries)
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