The reallocation of goods from low to high valued use can take the form of a change in legal ownership or a physical reallocation of the good from an area where it has low value to an area where it has a higher value. In this case, used cars are worth [more, less] in Mexico than they are in the United States. We know this because the price of used cars is [higher,lower ] in Mexico compared to the US. If people are left alone to pursue their self-interest as they define it, owners of used cars will enrich themselves if they physically relocate there cars to Mexico and sell them. They might do this directly or middlemen may do it for them. In either case, used cars ["will be sent from u.s to Mexico", "will be sent from Mexico to U.S"] . The graph shows the used car markets in the US and Mexico when the government interferes in the free market and prevents/regulates the sale of US used cars in Mexico. If NAFTA relaxed the restrictions on the import and export of used cars between the US and Mexico, the supply curves in the US and Mexico would shift. As cars were exported to Mexico, the US supply curve would ["shift right increasein supply", "shift left reduction in supply"] and the Mexican supply curve would ["shift left reduction in supply", "shift right increase in supply"] .
The reallocation of goods from low to high valued use can take the form of a change in legal ownership or a physical reallocation of the good from an area where it has low value to an area where it has a higher value.
In this case, used cars are worth [more, less] in Mexico than they are in the United States. We know this because the
If people are left alone to pursue their self-interest as they define it, owners of used cars will enrich themselves if they physically relocate there cars to Mexico and sell them. They might do this directly or middlemen may do it for them. In either case, used cars ["will be sent from u.s to Mexico", "will be sent from Mexico to U.S"] .
The graph shows the used car markets in the US and Mexico when the government interferes in the free market and prevents/regulates the sale of US used cars in Mexico.
If NAFTA relaxed the restrictions on the import and export of used cars between the US and Mexico, the supply curves in the US and Mexico would shift.
As cars were exported to Mexico, the US supply curve would ["shift right increasein supply", "shift left reduction in supply"] and the Mexican supply curve would ["shift left reduction in supply", "shift right increase in supply"] .
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