This document discusses international trade through diagrams and explanations of export and import analysis. It shows how domestic and world prices interact and how trade impacts producers and consumers. When the world price is higher than the domestic price, the country will export goods. Exports benefit producers who gain sales in the world market, while domestic consumers pay higher prices. Imports occur when the world price is lower, which adds new supply to the domestic market and benefits consumers who pay lower prices, while domestic producers face more competition.

1. Microeconomics
Chapter 9
!
International Trade

2. Domestic Price

3. Domestic Price
the price of a
good in the
local market

4. World Price

5. World Price
the price of a
good in the
world market

6. World Trade

7. World Trade
always winners
and losers

8. World Trade

9. World Trade
more winners
than losers

10. World Trade

11. World Trade
losers can be
better
organized

12. 100
90
80
70
60
50
40
30
20
10
0
Export Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price

13. 100
90
80
70
60
50
40
30
20
10
0
Export Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price

14. 100
90
80
70
60
50
40
30
20
10
0
Export Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price

15. 100
90
80
70
60
50
40
30
20
10
0
Export Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
World
Price
Domestic
Price

16. 100
90
80
70
60
50
40
30
20
10
0
Export Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
World
Price
Domestic
Price

17. 100
90
80
70
60
50
40
30
20
10
0
Export Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
World
Price
Domestic
Price

18. 100
90
80
70
60
50
40
30
20
10
0
Export Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
World
Price
Domestic
Price

19. 100
90
80
World
70
Price New Demand
60
50
40
30
20
10
0
Export Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
Domestic & World
“kink”

20. 100
90
80
World
70
Price New Demand
60
50
40
30
20
10
0
Export Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
Domestic & World
“kink”

21. 100
90
80
World
70
Price New Demand
60
50
40
30
20
10
0
Export Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
Domestic & World
“kink”

22. 100
90
80
World
70
Price New Demand
60
50
40
30
20
10
0
Export Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
Domestic & World
“kink”

23. 100
90
80
World
70
Price New Demand
60
50
40
30
20
10
0
Export Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
Domestic & World
“kink”
Total Sales

24. 100
90
80
World
70
Price New Demand
60
50
40
30
20
10
0
Export Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
Domestic & World
“kink”
Total Sales

25. 100
90
80
World
70
Price New Demand
60
50
40
30
20
10
0
Export Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
Domestic & World
“kink”
Total Sales

26. 100
90
80
World
70
Price New Demand
60
50
40
30
20
10
0
Export Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
Domestic & World
“kink”
Domestic Sales Total Sales

27. 100
90
80
World
70
Price New Demand
60
50
40
30
20
10
0
Export Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
Domestic & World
“kink”
Domestic Sales Total Sales

28. 100
90
80
Exports
7 - 3 = 4
World
70
Price New Demand
60
50
40
30
20
10
0
Export Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
Domestic & World
“kink”
Domestic Sales Total Sales

29. 100
90
80
Exports
7 - 3 = 4
World
70
Price New Demand
60
50
40
30
20
10
0
Export Analysis
Domestic
Supply
Demand
A
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
Domestic & World
“kink”
Domestic Sales Total Sales

30. 100
90
80
Exports
7 - 3 = 4
World
70
Price New Demand
60
50
40
30
20
10
0
Export Analysis
Domestic
Supply
Demand
A
B
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
Domestic & World
“kink”
Domestic Sales Total Sales

31. 100
90
80
Exports
7 - 3 = 4
World
70
Price New Demand
60
50
40
30
20
10
0
Export Analysis
Domestic
Supply
Demand
A
B
C
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
Domestic & World
“kink”
Domestic Sales Total Sales

32. 100
90
80
Exports
7 - 3 = 4
World
70
Price New Demand
60
50
40
30
20
10
0
Export Analysis
Domestic
Supply
Demand
A
B
C
D
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
Domestic & World
“kink”
Domestic Sales Total Sales

33. 100
90
80
Exports
7 - 3 = 4
World
70
Price New Demand
60
50
40
30
20
10
0
Export Analysis
Domestic
Supply
Demand
A
B
C
D
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
Domestic & World
“kink”
Domestic Sales Total Sales

34. 100
90
80
Exports
7 - 3 = 4
World
70
Price New Demand
60
50
40
30
20
10
0
Domestic
Supply
Demand
A
B
C
D
0 1 2 3 4 5 6 7 8 9 10
Domestic Buyers
pay a higher price
lose B to Sellers
Export Analysis
Domestic
Price
Domestic & World
“kink”
Domestic Sales Total Sales

35. 100
90
80
Exports
7 - 3 = 4
World
70
Price New Demand
60
50
40
30
20
10
0
Domestic
Supply
Demand
A
B
C
D
0 1 2 3 4 5 6 7 8 9 10
Domestic Buyers
pay a higher price
lose B to Sellers
Domestic Sellers
gain D from
world market
and gain B from
domestic buyers
Export Analysis
Domestic
Price
Domestic & World
“kink”
Domestic Sales Total Sales

36. 100
90
80
Exports
7 - 3 = 4
World
70
Price New Demand
60
50
40
30
20
10
0
Domestic
Supply
Demand
A
B
C
D
0 1 2 3 4 5 6 7 8 9 10
Domestic Buyers
pay a higher price
lose B to Sellers
Domestic Sellers
gain D from
world market
and gain B from
domestic buyers
Export Analysis
Domestic
Price
Domestic & World
“kink”
Domestic Sales Total Sales

37. 100
90
80
Exports
7 - 3 = 4
World
70
Price New Demand
60
50
40
30
20
10
0
Domestic
Supply
Consumers Lose
Producers Win
Demand
A
B
C
D
0 1 2 3 4 5 6 7 8 9 10
Domestic Buyers
pay a higher price
lose B to Sellers
Domestic Sellers
gain D from
world market
and gain B from
domestic buyers
Export Analysis
Domestic
Price
Domestic & World
“kink”
Domestic Sales Total Sales

38. 100
90
80
70
60
50
40
30
20
10
0
Import Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price

39. 100
90
80
70
60
50
40
30
20
10
0
Import Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price

40. 100
90
80
70
60
50
40
30
20
10
0
Import Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price

41. 100
90
80
70
60
50
40
30
20
10
0
Import Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
World
Price

42. 100
90
80
70
60
50
40
30
20
10
0
Import Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
World
Price

43. 100
90
80
70
60
50
40
30
20
10
0
Import Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
World
Price

44. 100
90
80
70
60
50
40
30
20
10
0
Import Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
World
Price

45. 100
90
80
70
60
50
40
30
20
10
0
Import Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
World
Price
New Supply
Domestic & World
“kink”

46. 100
90
80
70
60
50
40
30
20
10
0
Import Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
World
Price
New Supply
Domestic & World
“kink”

47. 100
90
80
70
60
50
40
30
20
10
0
Import Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
World
Price
New Supply
Domestic & World
“kink”

48. 100
90
80
70
60
50
40
30
20
10
0
Import Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
World
Price
New Supply
Domestic & World
“kink”

49. 100
90
80
70
60
50
40
30
20
10
0
Import Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
World
Price
New Supply
Domestic & World
“kink”
Total Sales

50. 100
90
80
70
60
50
40
30
20
10
0
Import Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
World
Price
New Supply
Domestic & World
“kink”
Total Sales

51. 100
90
80
70
60
50
40
30
20
10
0
Import Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
World
Price
New Supply
Domestic & World
“kink”
Total Sales

52. 100
90
80
70
60
50
40
30
20
10
0
Import Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
World
Price
New Supply
Domestic & World
“kink”
Domestic Sales Total Sales

53. 100
90
80
70
60
50
40
30
20
10
0
Import Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
World
Price
New Supply
Domestic & World
“kink”
Domestic Sales Total Sales

54. 100
90
80
70
60
50
40
30
20
10
0
Import Analysis
Domestic
Supply
Demand
Imports
7 - 3 = 4
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
World
Price
New Supply
Domestic & World
“kink”
Domestic Sales Total Sales

55. 100
90
80
70
60
50
40
30
20
10
0
Import Analysis
Domestic
Supply
Demand
A
Imports
7 - 3 = 4
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
World
Price
New Supply
Domestic & World
“kink”
Domestic Sales Total Sales

56. 100
90
80
70
60
50
40
30
20
10
0
Import Analysis
Domestic
Supply
Demand
A
B
Imports
7 - 3 = 4
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
World
Price
New Supply
Domestic & World
“kink”
Domestic Sales Total Sales

57. 100
90
80
70
60
50
40
30
20
10
0
Import Analysis
Domestic
Supply
Demand
A
B
C
Imports
7 - 3 = 4
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
World
Price
New Supply
Domestic & World
“kink”
Domestic Sales Total Sales

58. 100
90
80
70
60
50
40
30
20
10
0
Import Analysis
Domestic
Supply
Demand
A
B
C
D
Imports
7 - 3 = 4
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
World
Price
New Supply
Domestic & World
“kink”
Domestic Sales Total Sales

59. 100
90
80
70
60
50
40
30
20
10
0
Import Analysis
Domestic
Supply
Demand
A
B
C
D
Imports
7 - 3 = 4
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
World
Price
New Supply
Domestic & World
“kink”
Domestic Sales Total Sales

60. 100
90
80
70
60
50
40
30
20
10
0
Domestic
Supply
Demand
A
B
C
D
Imports
7 - 3 = 4
0 1 2 3 4 5 6 7 8 9 10
Domestic Buyers
pay a lower price
gain D from
world sellers
and gain B from
domestic sellers
Import Analysis
Domestic
Price
World
Price
New Supply
Domestic & World
“kink”
Domestic Sales Total Sales

61. 100
90
80
70
60
50
40
30
20
10
0
Domestic
Supply
Demand
A
B
C
D
Imports
7 - 3 = 4
0 1 2 3 4 5 6 7 8 9 10
Domestic Buyers
pay a lower price
gain D from
world sellers
and gain B from
domestic sellers
Domestic Sellers
lose B to Buyers
Import Analysis
Domestic
Price
World
Price
New Supply
Domestic & World
“kink”
Domestic Sales Total Sales

62. 100
90
80
70
60
50
40
30
20
10
0
Domestic
Supply
Demand
A
B
C
D
Imports
7 - 3 = 4
0 1 2 3 4 5 6 7 8 9 10
Domestic Buyers
pay a lower price
gain D from
world sellers
and gain B from
domestic sellers
Domestic Sellers
lose B to Buyers
Import Analysis
Domestic
Price
World
Price
New Supply
Domestic & World
“kink”
Domestic Sales Total Sales

63. 100
90
80
70
60
50
40
30
20
10
0
Domestic
Supply
Consumers Win
Producers Lose
Demand
A
B
C
D
Imports
7 - 3 = 4
0 1 2 3 4 5 6 7 8 9 10
Domestic Buyers
pay a lower price
gain D from
world sellers
and gain B from
domestic sellers
Domestic Sellers
lose B to Buyers
Import Analysis
Domestic
Price
World
Price
New Supply
Domestic & World
“kink”
Domestic Sales Total Sales

64. 100
90
80
70
60
50
40
30
20
10
0
Tariff Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price

65. 100
90
80
70
60
50
40
30
20
10
0
Tariff Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price

66. 100
90
80
70
60
50
40
30
20
10
0
Tariff Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price

67. 100
90
80
70
60
50
40
30
20
10
0
Tariff Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
World
Price

68. 100
90
80
70
60
50
40
30
20
10
0
Tariff Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
World
Price

69. 100
90
80
70
60
50
40
30
20
10
0
Tariff Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
World
Price

70. 100
90
80
70
60
50
40
30
20
10
0
Tariff Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
World
Price

71. 100
90
80
70
60
50
40
30
20
10
0
Tariff Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
World
Price

72. 100
90
80
70
60
50
40
30
20
10
0
Tariff Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
World
Price
Tariff of 10

73. 100
90
80
70
60
50
40
30
20
10
0
Tariff Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
World
Price
Tariff of 10

74. 100
90
80
70
60
50
40
30
20
10
0
Tariff Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
World
Price
Tariff of 10

75. 100
90
80
70
60
50
40
30
20
10
0
Tariff Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
Price
with
Tariff
World
Price
Tariff of 10

76. 100
90
80
70
60
50
40
30
20
10
0
Tariff Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
Price
with
Tariff
World
Price
Tariff of 10

77. 100
90
80
70
60
50
40
30
20
10
0
Tariff Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
Price
with
Tariff
World
Price
Tariff of 10

78. 100
90
80
70
60
50
40
30
20
10
0
Tariff Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
Price
with
Tariff
World
Price
Tariff of 10

79. 100
90
80
70
60
50
40
30
20
10
0
Tariff Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
Price
with
Tariff
World
Price
Tariff of 10

80. 100
90
80
70
60
50
40
30
20
10
0
Tariff Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
Price
with
Tariff
World
Price
Tariff of 10

81. 100
90
80
70
60
50
40
30
20
10
0
Tariff Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
Price
with
Tariff
World
Price
Tariff of 10

82. 100
90
80
70
60
50
40
30
20
10
0
Tariff Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
Price
with
Tariff
World
Price
A
Tariff of 10

83. 100
90
80
70
60
50
40
30
20
10
0
Tariff Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
Price
with
Tariff
World
Price
A
B
Tariff of 10

84. 100
90
80
70
60
50
40
30
20
10
0
Tariff Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
Price
with
Tariff
World
Price
A
B
C Tariff of 10

85. 100
90
80
70
60
50
40
30
20
10
0
Tariff Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
Price
with
Tariff
World
Price
A
B
C D Tariff of 10

86. 100
90
80
70
60
50
40
30
20
10
0
Tariff Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
Price
with
Tariff
World
Price
A
B
C D E Tariff of 10

87. 100
90
80
70
60
50
40
30
20
10
0
Tariff Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
Price
with
Tariff
World
Price
A
B
C D E F Tariff of 10

88. 100
90
80
70
60
50
40
30
20
10
0
Tariff Analysis
Domestic
Supply
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
Price
with
Tariff
World
Price
A
B
C D E F
G
Tariff of 10

89. 100
90
80
70
60
50
40
30
20
10
0
Tariff Analysis
Domestic
Supply
Consumers Lose
Producers Win
Government Wins
Deadweight Losses
Demand
0 1 2 3 4 5 6 7 8 9 10
Domestic
Price
Price
with
Tariff
World
Price
A
B
C D E F
G
Tariff of 10

90. Favor

91. Favor
variety
lower costs
competition
ideas

92. Oppose

93. Oppose
jobs
security
infant
fairness

94. Should you
retaliate?

95. Should you
retaliate?
No

96. Trade is
an innovation

97. Trade is
an innovation
don’t need to make it
if I can trade for it