Q.2Given the Equilibrium relative priceNation 1Pa Pa 1Nation 260PA 4Pr 250 -4030P20PA1001102030405060FIGURE 4.5 Equilibrium-Relative Commodity Price with Trade.Using a graph of offer curves, for each of the following, identify the effect of the change listesrelative price of good X and on exports of good X by Nation 1.a. The supply ofY increases in Nation 2.6. The demand for X decreases in Nation 1.

Offer curve represents the country's terms of trade or reciprocal demand which snows countries…

Answered: Q.2 Given the Equilibrium relative…

Q.2 Given the Equilibrium relative price Nation 1 Pa Pa 1 Nation 2 G' 60 PA 4 Pr 2 50 40 30 P! 20 PA 10 01 10 20 30 40 50 60

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter9: Application: International Trade

Section: Chapter Questions

Problem 3QR

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Question

Q.2
Given the Equilibrium relative price
Nation 1
Pa Pa 1
Nation 2
60
PA 4
Pr 2
50 -
40
30
P
20
PA
10
01
10
20
30
40
50
60
FIGURE 4.5 Equilibrium-Relative Commodity Price with Trade.
Using a graph of offer curves, for each of the following, identify the effect of the change listes
relative price of good X and on exports of good X by Nation 1.
a. The supply ofY increases in Nation 2.
6. The demand for X decreases in Nation 1.

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