PARTIAL EQUILIBRIUM

ONE GOOD

NO TRADE EQUILIBRIUMPRICE OF BREAD

QUANTITY OF BREAD

A

D

PB

QB

Sd

Dd

NO TRADE EQUILIBRIUMPRICE OF BREAD

QUANTITY OF BREAD

A

D

PB

QB

Sd

Dd

ProducerSurplus

NO TRADE EQUILIBRIUMPRICE OF BREAD

QUANTITY OF BREAD

A

D

PB

QB

Sd

Dd

ConsumerSurplus

CONSUMER SURPLUS MEASURES THE WELFARE GAIN THAT CONSUMERS

OBTAIN FROM PURCHASING GOODS THAT ARE BELOW

THEIR WORTH.

PRODUCER SURPLUS MEASURES THE WELFARE GAIN THAT PRODUCERS OBTAIN FROM SELLING GOODS AT PRICES THAT

ARE ABOVE THEIR PRODUCTION COST.

GAINS FROM TRADE:EXPORTING COUNTRY

PRICE OF BREAD

QUANTITY OF BREAD

A

G

E

QB

Sd

Dd

F

GAINS FROM TRADE:EXPORTING COUNTRY

PRICE OF BREAD

QUANTITY OF BREAD

A

G

E

Sd

Dd

F

CB QB

BC D

EXPORT

PRODUCER SURPLUS BE- FORE TRADE

PW

GAINS FROM TRADE:EXPORTING COUNTRY

PRICE OF BREAD

QUANTITY OF BREAD

A

G

E

Sd

Dd

F

CB QB

BC D

EXPORT

PRODUCER SURPLUS AFTER TRADE

PW

GAINS FROM TRADE:EXPORTING COUNTRY

PRICE OF BREAD

QUANTITY OF BREAD

A

G

E

Sd

Dd

F

CB QB

BC D

EXPORT

PW

CONSUMER SURPLUS

GAINS FROM TRADE:EXPORTING COUNTRY

PRICE OF BREAD

QUANTITY OF BREAD

A

G

E

Sd

Dd

F

CB QB

BC D

EXPORT

PW

CONSUMER SURPLUS AFTER TRADE

GAINS FROM TRADE:IMPORTING COUNTRY

PRICE OF WINE

QUANTITY OF WINE

A

G

B

QB

Sd

Dd

C

GAINS FROM TRADE:IMPORTING COUNTRY

PRICE OF WINE

QUANTITY OF WINE

A

G

B

Sd

Dd

CPW FD

IMPORT

GAINS FROM TRADE:IMPORTING COUNTRY

PRICE OF WINE

QUANTITY OF WINE

A

G

B

Sd

Dd

CPW FD

IMPORT

CONSUMER SURPLUS

GAINS FROM TRADE:IMPORTING COUNTRY

PRICE OF WINE

QUANTITY OF WINE

A

G

B

Sd

Dd

CPW FD

IMPORT

GAINS FROM TRADE:IMPORTING COUNTRY

PRICE OF WINE

QUANTITY OF WINE

A

G

B

Sd

Dd

CPW FD

IMPORT

EFFECTIVE SUPPLY AND DEMAND

EFFECTIVE SUPPLY AND DEMAND MEASURE THE

IMPACT OF DOMESTIC AND WORLD MARKETS ON A

COUNTRY

EFFECTIVE DEMAND FOREXPORTING COUNTRY

PRICE OF BREAD

QUANTITY OF BREAD

A

G

E

QB

Sd

Dd

F

PD=PWDe

EFFECTIVE SUPPLY CURVE:IMPORTING COUNTRY

PRICE OF WINE

QUANTITY OF WINE

A

G

Sd

Dd

Pd = PwFD

Se

EXCESS DEMAND CURVEAUTARKY NO EXCESS DEMANDPRICE OF BREAD

QUANTITY OF BREAD

A

G

E

QB

Sd

Dd

F

EXCESS DEMAND CURVEALLOW TRADE TO OCCUR

PRICE OF BREAD

QUANTITY OF BREAD

A

G

E

QP

Sd

Dd

F

QC

EXCESS DEMAND CURVEALLOW TRADE TO OCCUR

PRICE

QUANTITY

A

G

E

QP

Sd

Dd

QC

PRICE

QUANTITY

PW

PW

QT

A

B

C

ED

EXCESS SUPPLY CURVEAUTARKY NO EXCESS SUPPLY

PRICE

QUANTITY

A

G

E

QB

Sd

Dd

F

EXCESS SUPPLY CURVEALLOW TRADE TO OCCUR

PRICE

QUANTITY

A

G

E

QP

Sd

Dd

QC

PRICE

QUANTITY

PW

PW

QT

A

B

C

ES

EXCESS SUPPLY AND DEMAND CURVE

PRICE

QUANTITY

A

D

QT

ESSUM

EDSUM

C

PW

B