Micro & Macro. Chapter 9 【Application: International Trade】

1. Welfare effects of free trade in an exporting country
Consider the Bolivian market for lemons. The following graph shows the domestic demand and domestic supply curves for lemons in Bolivia. Suppose Bolivia's government currently does not allow..2. Winners and losers from free trade
Consider the market for meekers in the imaginary economy of Meekertown. In the absence of international trade, the domestic price of meekers is...3. Welfare effects of a tariff in a small country
Suppose New Zealand is open to free trade in the world market for wheat. Because of New Zealand’s small size, the demand for and supply of wheat in New Zealand do not affect the world price. The following graph shows the domestic wheat market in New Zealand.

4. Effects of a tariff on international trade
per ton and is represented by the horizontal black line. Throughout the question, assume that the amount demanded by any one country does not affect the world price of maize and that there are no transportation or transaction costs associated with international trade in maize.

5. Free-trade benefits
In addition to the positive welfare effects that free trade has on an economy, there are a variety of other benefits of international trade. Consider the following scenario: (without free trade, diamonique has market power as local producer... If Tabletop Ltd. can produce more goods, it can do so..Because of international trade, poorer countries are able to learn about technological)



6. The arguments for restricting trade
A political pundit argues that the United States should threaten to impose a tariff..explains that it is necessary to impose trade restrictions, such as a tariff..The lobbyist claims that the U.S. semiconductor industry is new and cannot currently compete with foreign firms. However, if trade restrictions were...the lobbyist claims that producers in other countries receive subsidies to export