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Chapter_18_Key_Question_Solutions - 18-6(Key Question Refer...

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18-6 ( Key Question ) Refer to Figure 3.6, p. 54 (Chapter 3). Assume that the graph depicts the U.S. domestic market for corn. How many bushels of corn, if any, will the United States export or import at a world price of $1, $2, $3, $4, and $5? Use this information to construct the U.S. export supply curve and import demand curve for corn. Suppose the only other corn-producing nation is France, where the domestic price is $4. Which country will export corn; which will import it? At $1: import 15,000. At $2: import 7,000. At $3: no imports or exports. At $4: export 6,000. At $5: export 10,000. The United States will export corn; France will import it. 18-7 ( Key Question ) Draw a domestic supply and demand diagram for a product in which the United States does not have a comparative advantage. What impact do foreign imports have on domestic price and quantity? On your diagram show a protective tariff that eliminates approximately one-half the assumed imports. What are the price-quantity
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