Information for questions 10-12 The world is made of three c…

Information for questions 10-12 The world is made of three countries, A, B, and C. There are no transportation costs among these countries, just (possibly) tariffs. Countries A and B are considering forming a Regional Trade Agreement (RTA). If they do so, then they will have no tariffs against each other’s goods, but will keep their tariffs against country C’s goods. The following table lists the costs of production per unit of steel in the three countries, and also the tariffs that A imposes on steel from country B and C before the RTA is formed.   Cost of production ($/unit of steel produced) A’s tariff ($/unit of steel imported) Country A 21   Country B 15 5 Country C 11 5 Before forming an RTA with country B, country A imports steel from:

Information for questions 13-19 There are two countries, Hom…

Information for questions 13-19 There are two countries, Home and Foreign. Labor is the only factor of production. There are two goods, X and Y. The following table shows the output of each good per hour of labor, in the two countries. Home Foreign Good X 10 8 Good Y 5 2 Calculate the relative price of good X with respect to good Y (that is, PX/PY) in the Home country, if the Home country is autarky. Enter a whole or decimal number, as appropriate. Enter 0 if the answer cannot be obtained with the information given. Only exact answer accepted.

Information for questions 14-20 There are two countries, Hom…

Information for questions 14-20 There are two countries, Home and Foreign. Labor is the only factor of production. There are two goods, X and Y. The following table shows the output of each good per hour of labor, in the two countries. Home has 100 units of labor, Foreign has 500 units of labor.   Home Foreign Good X 1 4 Good Y 3 24 Putting quantity of good X on the horizontal axis, and quantity of good Y on the vertical axis, calculate the horizontal intercept of the Foreign Production Possibilities Curve. Enter a whole or decimal number, as appropriate. Enter 0 if the answer cannot be obtained with the information given. Only exact answer accepted. 

Information for questions 21-25 The graphs below show the p…

Information for questions 21-25 The graphs below show the production possibilities curves (PPC) for the U.S. and Canada, which both produce cars and wheat. Initially suppose that the two countries trade only with each other. Careful: the figures are not on the same scale, don’t use the scale for any answers. Instead use your reasoning and calculations.     Based on the graphs above, which of the following is true?

Information for questions 21-25 The graphs below show the p…

Information for questions 21-25 The graphs below show the production possibilities curves (PPC) for the U.S. and Canada, which both produce cars and wheat. Initially suppose that the two countries trade only with each other. Careful: the figures are not on the same scale, don’t use the scale for any answers. Instead use your reasoning and calculations.     Complete the sentence: When the U.S. and Canada trade with each other, and no other country, the U.S. specializes in __________ and Canada specializes in ________ . A country specializes in a good when it only produces that good, and produces 0 units of the other good.