7) Assume that the US is a large country in the semi-conductor market. If the US is an exporter of the good and experiences a technological improvement, will the US always be better off? Show and explain why or why not.

8) National security demands have made it imperative for the US to close the toilet paper trade gap (just think what would happen in times of war if we couldnt produce our own!). The government has decided to reduce our imports from 100 million units to 90 million units. As the supreme TP czar, which of the following policies should be chosen? Show and explain why. a. A production subsidy b. A consumption tax c. An import tariff

9) Show why in a competition between the Boeing and Airbus that autarky may be the preferred welfare situation to free trade. Explain how you draw this conclusion. 10) Explain why a VER is likely to generate lower welfare than a quota.

10) Explain why a VER is likely to generate lower welfare than a quota.