International Economics: Theory, Application, and Policy, Ch. 7;  Charles van Marrewijk, 2006
Figure 7.1 Bertil Ohlin (1899-1979)
1
International Economics: Theory, Application, and Policy, Ch. 7;  Charles van Marrewijk, 2006
Figure 7.2 Consumer optimization problem
5
U1
U2
U3
4
income expansion path
C
Food
3
B
2
income = 6
A
1
income = 4
income = 2
0
0
1
2
Manufactures
3
4
5
2
International Economics: Theory, Application, and Policy, Ch. 7;  Charles van Marrewijk, 2006
Figure 7.3 Homothetic iso-utility curves are radial blow-ups
5
C
4
B
Food
3
F
U3
2
A
E
U2
1
D
U1
0
0
1
2
Manufactures
3
4
5
3
International Economics: Theory, Application, and Policy, Ch. 7;  Charles van Marrewijk, 2006
Figure 7.4 Production possibility frontier
6
5
Food
4
3
2
1
0
0
1
2
3
Manufactures
4
5
6
4
International Economics: Theory, Application, and Policy, Ch. 7;  Charles van Marrewijk, 2006
Figure 7.5 Production possibility frontiers; impact of changing m
6
5
Food
4
 m  0.9
3
 m  0.3
2
 m  0 .7
1
0
0
1
2
3
Manufactures
4
5
6
5
International Economics: Theory, Application, and Policy, Ch. 7;  Charles van Marrewijk, 2006
Figure 7.6 Impact of a change in capital on the ppf and the Rybczynski line
6
5
Food
4
A
3
capital
Rybczynksi
B
line
2
C
1
K=2
K=5
K=8
0
0
1
2
3
4
Manufactures
5
6
7
8
6
International Economics: Theory, Application, and Policy, Ch. 7;  Charles van Marrewijk, 2006
7
Figure 7.7 Share of US and world trade in different types of goods, 1998 (%)
58
60
42
40
20
13
19
17
23
13
3
5
7
0
primary
natural-res.
labor
USA
world
technology
human capital
International Economics: Theory, Application, and Policy, Ch. 7;  Charles van Marrewijk, 2006
8
Figure 7.8 Equilibrium structure
delivery of Manufactures
Capital owners
capital services
(rental income)
(spending m on Manufactures)
Production of
Manufactures
Consumers
Laborers
Production of Food
labor services
(wage income)
delivery of Food
direction of goods flows
(direction of money flows)
(spending 1-m on Food)
International Economics: Theory, Application, and Policy, Ch. 7;  Charles van Marrewijk, 2006
Figure 7. 9 Autarky production and consumption
6
(slope
= p m/p f )
income
line
welfare
(slope = MRS)
5
Food
4
3
autarky
production
autarky
consumption
2
ppf
(slope = MRT)
1
0
0
1
2
3
Manufactures
4
5
6
9
International Economics: Theory, Application, and Policy, Ch. 7;  Charles van Marrewijk, 2006
Figure 7. 9 Autarky production and consumption
6
income
welfare
5
ppf
Food
4
3
2
autarky
1
0
0
1
2
3
Manufactures
4
5
6
10
International Economics: Theory, Application, and Policy, Ch. 7;  Charles van Marrewijk, 2006
Figure 7.10 Autarky equilibrium
7
UB
6
ppfB
5
Food
4
autarkyB
3
autarkyA
2
UA
1
ppfA
0
0
1
2
3
4
Manufactures
5
6
7
11
International Economics: Theory, Application, and Policy, Ch. 7;  Charles van Marrewijk, 2006
Figure 7.11
International
trade
equilibrium
12
7
UB
6
ppfB
5
prB
exportf
Food
4
autB
ppfA
3
coA
importm
coB
import f
2
1
autA
UA
exportm
prA
0
0
1
2
3
4
Manufactures
5
6
7
International Economics: Theory, Application, and Policy, Ch. 7;  Charles van Marrewijk, 2006
Figure 7.12 International trade and Rybczynski lines
7
6
ppfB
5
prB
labor
Ryb
line
4
Food
ppfA
3
coA
ppf
coB
2
pr
1
capital Ryb line
prA
0
0
1
2
3
4
Manufactures
5
6
7
13
International Economics: Theory, Application, and Policy, Ch. 7;  Charles van Marrewijk, 2006
Figure 7.13 Technology intensive manufacturing exports; share, 1998
technology int. man.
share of exports (%)
25.2 to 76.4
12.4 to 25.2
4.3 to 12.4
1.7 to 4.3
0 to 1.7
(30)
(31)
(29)
(28)
(33)
14
International Economics: Theory, Application, and Policy, Ch. 7;  Charles van Marrewijk, 2006
15
Figure 7.14 Autarky values
a. hypothetical autarky values
price manufactures / price food
6
Zambia
4
2
Bolivia
Austria
Norway
0
0
1
w age-rental ratio
2
3
International Economics: Theory, Application, and Policy, Ch. 7;  Charles van Marrewijk, 2006
16
Figure 7.14 Autarky values
b. hypothetical autarky production per worker
1
food
Norway
Austria
Bolivia
Zambia
0
0
1
manufactures
2
3
International Economics: Theory, Application, and Policy, Ch. 7;  Charles van Marrewijk, 2006
17
Figure 7.15 Free trade production per worker levels
hypothetical production per worker with trade
1
consumption expansion path
Austria consumption point
Bolivia
food
Zambia
Austria income line
Austria production
Norway
0
0
1
2
manufactures
3
4