1.1 With no international trade, what is the price of honey and the quantity bought and sold in the United States? (10)

1.2 Critically evaluate three policy elements that can negatively impact the export of U.S. honey to Australia. (15)

1.3 With free international trade, what is: a) the U.S. price of honey; b) the quantity bought by Americans; c) the quantity produced in the United States; and d) the quantity of honey exported or imported? (20)

1.4 Critically compare the notions of absolute and relative (comparative) advantage for a country, using your own examples. Argue whether or not the Americans gain from international trade in honey. If yes, do all Americans gain? If not, who loses? Overall, do the gains exceed the losses?

The table below shows the U.S. supply and demand schedule for honey from U.S. producers. At the same time, the average world price of honey is $8 a jar