Lecture 2.

Producers, Consumers and the

Efficiency of the Markets
January 21, 2020
Interdependence and Gains from Trade
Interdependence and Gains from Trade
Demand and Supply
What determines the quantity an individual demands?
• Price
• Income
• Prices of Related Goods
• Tastes
• Expectations
What determines the quantity an individual supplies?
• Price
• Input Prices
• Technology
• Expectations
Consumers Surplus
Consumers Surplus
Producers Surplus
Producers Surplus
Efficiency of the Markets
The cost of Taxation
The cost of Taxation
The cost of Taxation
The cost of Taxation
The cost of Taxation
The Determinants of DWL
Concentrate your attention on Chapter’s
case-studies to discuss on the seminar
International Trade
International Trade
International Trade: Export
International Trade: Export
International Trade: Import
International Trade: Import
International Trade: Effect of Tariffs
International Trade: Effect of an import
Quota
Concentrate your attention on Chapter’s
part: “Arguments for restricting trade” to
discuss on the seminar