hnd 世界经济2.doc

Report title
Evaluation of International Trade and World Economies
Report written by
JiaQiWANG
Data: December 2009
the important aspects of the world economy. There are three monly expressed gains are:
It allows countries to import goods which they may be unable to produce themselves, in exchange for those that they can produce.
Secondly, it allows a country to specialise in the production of goods in which it has some form of advantage - possibly from the natural resources available. It is also important to highlight that the specialization of production will implicate lowered costs as that particular country is able to invest the necessary funds for production.
Furthermore, international trade often results in the total world production level increasing - which is beneficial for the world economy as currency values are stimulated.
trade is a system in which the trade of goods and services between or within countries flows unhindered by government-imposed restrictions.
parative advantage is said to occur where one country can produce goods at a lower opportunity cost – it sacrifices less resources in production. For example, Russia and China can produce either food or clothes by One unit of labour, as follows
 
Food
Clothes
Russia
400 or
300
China
200 or
240
From the chart, we can get some message that Russia has absolute advantage in producing food and clothes.
The opportunity cost of producing food in Russia is 300/400=3/4
The opportunity cost of producing clothes in Russia is 400/300=4/3
The opportunity cost of producing food in China is 240/200=6/5
The opportunity cost of producing clothes in China is 200/240=5/6
From the above calculation result, which can be seen that Russia parative advantage in producing food than China, China parative advantage in producing clothes than Russia.
Before trade, each country divides its labour between the two products, we can get this table as follows:
 
Food
Clothes