Use the data on the U.S. wholesale market for roses in Problem 1 to work this problem.

a. Explain who gains and who loses from free international trade in roses compared to a situation in which Americans buy only roses grown in the United States.

b. Draw a graph to illustrate the gains and losses from free trade.

c. Calculate the gain from international trade.

Problem 1

a. Without international trade, what would be the price of a container of roses and how many containers of roses a year would be bought and sold in the United States?

b. At the price in your answer to part (a), does the United States or the rest of the world have a comparative advantage in producing roses?