If each country specializes in the good for which it has a comparative advantage

Question

If each country specializes in the good for which it has a comparative advantage, what will japan export to the U.S. and what will be the range of-terms of trade- for that item? d. Compare the combined total production of DVD players and motorcycles at points A and H (before specialization) and after specialization. assuming each country specializes completely in the good for which it has a comparative advantage 3. The model below represents the U.S. market for sup. assuming that U .S. supply and demand has no impact on world prices. Assume SI represents the U.S. domestic supply of sugar and 52 represents the supply in the U.S. under conditions of free trade and S3 represents supply with a tariff on imports.

Explanation / Answer

3.

a. The price will be P3 if US imposes tariff.

b. If sugar is to totally banned from import, then the price will be P1

c. If there is no restriction on import then the price will be P2.

*as for previous question it will be answered by by some other person!

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