econ 370 HW #1

# econ 370 HW #1 - Env 375/Econ 370 Professor G Helfand...

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Env 375/Econ 370 Winter 2008 Professor G. Helfand Problem Set #1 Due Friday, January 18, In Class Each part of each question is worth 5 points, for a total of 100 points. Please explain your answers . Without an explanation, you are likely to get partial credit at best. 1. Suppose that the U.S. and Canada currently do not trade wood products (pulp for making paper and lumber for construction). Also suppose that the U.S. and Canada have very similar populations in terms of income and preferences, though the population of the U.S. is much higher than that of Canada. Both Canada and the U.S. have abundant forest resources, though suppose that the U.S. has less productive forest land than Canada. (a) Describe the shape (i.e., downward sloping, upward sloping, horizontal, or vertical) you expect the per person demand curves for wood products to have. Do you expect these curves to differ between the two countries? If so, how? If not, why not? (b) Describe the shape of the aggregate (that is, the total) demand curves for wood products in Canada and the U.S. Do you expect these curves to differ between the two countries? If so, how? If not, why not? (c) Describe the shape you expect for the aggregate supply curves for wood products for each country. Do you expect these curves to differ between the two countries? If so, how? If not, why not?

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