1.)
Suppose the Edgeworth box diagram above pertains to trade between Mexico and the U.S. Before the ratification of the North American Free Trade Agreement (NAFTA), the consumption of computer chips and textiles in both countries is given by point A. At point A, what is true regarding the relative
1. At point A, the price of computer chips in the U.S. is {Blank 1). Fill in the blank, read surrounding text. when compared to Mexico.
2.) Suppose the Edgeworth box diagram above pertains to trade between Mexico and the U.S. Before the ratification of the North American Free Trade Agreement (NAFTA), the consumption of computer chips and textiles in both countries is given by point A. At point A, what is true regarding the relative price of textiles in the U.S. versus Mexico?The price of textiles in the U.S. is (Blank 1). Fill in the blank, read surrounding text. when compared to Mexico.
3.)Suppose the Edgeworth box diagram above pertains to trade between Mexico and the U.S. Before the ratification of the North American Free Trade Agreement (NAFTA), the consumption of computer chips and textiles in both countries is given by point A. If the ratification of NAFTA allows trade to bring about the efficient equilibrium, which point in the diagram indicates the level of consumption by each country?
If NAFTA allows the two countries to trade, the efficient equilibrium is at point (Blank 1). Fill in the blank, read surrounding text. on the graph.
4.) Suppose the Edgeworth box diagram above pertains to trade between Mexico and the U.S. Before the ratification of the North American Free Trade Agreement (NAFTA), the consumption of computer chips and textiles in both countries is given by point A. At the new equilibrium, what has happened to the price of computer chips in the U.S.?
At the new equilibrium, the price of computer chips in the U.S. has (Blank 1). Fill in the blank, read surrounding text. while the price of textiles has Blank 2. Fill in the blank, read surrounding text. . The opposite is true in Mexico.
5.) Suppose the Edgeworth box diagram above pertains to trade between Mexico and the U.S. Before the ratification of the North American Free Trade Agreement (NAFTA), the consumption of computer chips and textiles in both countries is given by point A. How do we know both countries are better off by free trade?
We know that both countries are made better off by free trade because they each attain an indifference curve that provides (Blank 1). Fill in the blank, read surrounding text. utility.
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