Please look at the images and pick from the answer choices I have provided (bold choices). The shift from S1 to SNAFTA shows the (Export or import) of a cars to/from Mexico. The shift from S2 to SNAFTA shows the (Export or import) of cars to/from the USA. As cars are reallocated from low to high valued use, the price of cars in Mexico will ( Fall from p3 to p2 or Rise from p2 to p3) and the price of cars in the USA will (Rise from p1 to p2 or fall from p3 to p2) The import/export of cars will continue as long as the price (value) of cars is different in the US and Mexico because as the long as prices are different, owners of cars (or middlemen) can make themselves richer by importing or exporting cars.
Please look at the images and pick from the answer choices I have provided (bold choices). The shift from S1 to SNAFTA shows the (Export or import) of a cars to/from Mexico. The shift from S2 to SNAFTA shows the (Export or import) of cars to/from the USA. As cars are reallocated from low to high valued use, the price of cars in Mexico will ( Fall from p3 to p2 or Rise from p2 to p3) and the price of cars in the USA will (Rise from p1 to p2 or fall from p3 to p2) The import/export of cars will continue as long as the price (value) of cars is different in the US and Mexico because as the long as prices are different, owners of cars (or middlemen) can make themselves richer by importing or exporting cars.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Please look at the images and pick from the answer choices I have provided (bold choices).
The shift from S1 to SNAFTA shows the (Export or import) of a cars to/from Mexico.
The shift from S2 to SNAFTA shows the (Export or import) of cars to/from the USA.
As cars are reallocated from low to high valued use, the
The import/export of cars will continue as long as the price (value) of cars is different in the US and Mexico because as the long as prices are different, owners of cars (or middlemen) can make themselves richer by importing or exporting cars.
Transcribed Image Text:The graph shows the used car markets in the US and Mexico before NAFTA removed
restriction on cross border trade in used cars.
United States
Mexico
S2
P3
D2
Qi
Quantity
Quantity
Transcribed Image Text:Relaxing the restrictions on the import and export of used cars would cause the supply
curves in the US and Mexico to shift.
The shift is depicted in the following graph.
United States
Mexico
SNAFTA
P3
SNAFTA
P2
D2
Qi
Quantity
Quantity
P,
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