Price Use the following graph, where Sd and Dd are the domestic supply and demand for a product and P is the world price of that product, to answer the next question. P S Sa+Q P E G H F Pe K Dd 0 V W x y Quantity Z Sd+Q is the product supply curve after an import quota is imposed. The effect of the import quota on domestic price and domestic consumption is A) the same as that of a tariff of P₁-Pc. B) the same as that of a tariff of Pa-Pt- the same as that of a tariff of Pa-Pc.

Are the gains from international trade more likely to be relatively more important to large or small countries?

The country of Pepperland exports steel to the Land of Submarines. Information for the quantity demanded (Qd) and quantity supplied (Qs) in each country, in a world without trade, are given in Table 34.6 and Table 34.7. What would be the equilibrium price and quantity in each country in a world without trade? How can you tell? What would be the equilibrium price and quantity in each country if trade is allowed to occur? How can you tell? Sketch two supply and demand diagrams, one for each country, in the situation before trade. On those diagrams, show the equilibrium price and the levels of exports and imports in the world after trade. If the Land of Submarines imposes an anti- dumping import quota of 30, explain in general terms whether it will benefit or injure consumers and producers in each country. Does your general answer change if the Land of Submarines imposes an import quota of 70?