An Interactive Computer Model of Two-Country Trade

We introduce an interactive computer model of two-country trade that allows students to investigate the consequences of changing economic parameters. The model is self-contained and makes no assumption concerning the existence of social welfare functions or social indifference curves. The factors of production earn incomes that lead to the demand for two goods. Students can see who are the winners and losers when going from a closed economy to an open economy. The students are able to predict the consequences and then obtain immediate feedback.