Chapter 1: Preliminaries

In order to derive clear-cut results, international trade theory often makes use of simple small-scale models, which consist of only small numbers of goods, production factors, and/or countries. Those results obtained from small-scale models, however, can be extended to more general settings (with appropriate modifications and reinterpretations) as far as we fully recognize which properties are generic to an economy and which are specific to the model under consideration. In this preliminary chapter, we introduce some basic concepts, technical terms, and analytical tools in a general setting, which will be used in some specific contexts later in the book…