1. Suppose that country I and trading partner country II decrease their willingness to trade at the same time. What will be the impact on the terms of trade and on the volume of trade? (Note: You will not be able to say anything concrete about one of these impacts. Why not?)

2. The United States has had an embargo on trade with Cuba for 50 years but pressure is increasing to relax it. Opponents of ending the embargo argue that opening trade between the United States and Cuba would benefit Cuba and hurt the United States by injuring U.S. producers of goods that compete with potential Cuban exports. Evaluate this position utilizing what you have learned in this chapter.