Consumer Optimum in Open Economy

The modern market economy is characterised by an extremely fast pace of technological progress and a deepening process of globalisation. Both of these phenomena contribute to the increasing role of international trade and the gradual blurring of the distinction between domestic and foreign markets. An institutional expression of such trends was the establishment of the The institutional expression of such trends was the establishment of the World Trade Organisation (WTO) in 1995, which in December 2001 already had 143 members (including Poland). Such a large number of countries therefore decided to strive to liberalise international trade as much as possible. Traditionally, international economic relations are considered to be part of macroeconomics. However, nothing prevents the use of classical microeconomic tools to analyse phenomena related to international trade. An attempt to do so is presented in this paper, focusing only on the impact of trade between two countries on the formation of the consumer optimum. A typical model of the consumer optimum assumes that a microeconomic actor can make choices between two goods x and y, over which he has certain preferences. He derives utility from purchasing both goods, but at the same time has to incur expenditure. If we assume that there is no borrowing, and therefore the intertemporal choice problem is eliminated, the maximum nominal value of expenditure must equal nominal income.