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Unformatted text preview: e. Assume that trade is opened at zero transportation cost. Find and graph the new equilibrium under free trade. What is the world price w P ? What is the volume of trade? f. Home imposes a specific tariff of 5 on wheat imports. Determine the effects on the price of wheat at Home and in Foreign. g. Show graphically and calculate the terms-of-trade gain, the efficiency loss and the total effect on welfare of the tariff at Home....
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- Spring '11