Open Economy Supply & Demand Analysis

This lecture introduces the basics of supply and demand analysis in a trading economy, focusing on the import demand curve, welfare effects, trade volume effects, and equilibrium in the MS-MD diagram. It covers topics such as the ToT effect, border price effect, and the implications of trade policy changes. Through various diagrams, students learn to determine world prices, track welfare changes, and understand the consequences of trade policies. The lecture also includes quizzes to test understanding of concepts like shifts in demand and supply curves, comparative advantage, and the effects of trade bans.