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9. [1 point] International trade Hypothesis. Consider opening the market to international trade. Assume the domestic price is that of the initial equilibrium [Assume also
9. [1 point] International trade Hypothesis. Consider opening the market to international trade. Assume the domestic price is that of the initial equilibrium [Assume also that there is only one good produced in both economies and that you are doing a static analysis of a partial equilibrium model]. 9.1. [0.5 points] If the world price of your product is below your initial equilibrium price, will the country decide to be an importer or an exporter of the good? (numerical, graphical and verbal answers). 9.2. [0.25 points] Compute the net gain from trade and locate it in the figure. Are producers better off with trade? And consumers? (numerical, graphical and verbal answers) 9.3. [0.25 points] How does international trade affect your company? (verbal answer)
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