Consider the following variation of Table 11-1 for the U.S. semiconductor market U.S. Tariff rates From Canada, before NAFTA From Asia, before NAFTA From Canada, after NAFTA From Asia, after NAFTA From the United States f. 0% $45 g. $40 $43 $40 $46 8% $W $X $Z $X $46 16% $52.2 d. Fill in the values for W, X, Y, and Z. e. Suppose that before NAFTA, the United States had a 16% tariff on imported semiconductors. Which country supplied the U.S. market? Is it the lowest-cost producer? After NAFTA, who supplies the U.S. market? Has either trade creation or diversion occurred because of NAFTA? Explain. Now suppose that before NAFTA, the United States had an 8% tariff on imported semiconductors. Then repeat parts (b) and (c). h. In addition to the assumptions made in (d), consider the effect of an increase in high-technology investment in Canada due to NAFTA, allowing Canadian firms to develop better technology. As a result, three years after the initiation of NAFTA, Canadian firms can begin to sell their products to the United States for $40. What happens to the U.S. trade pattern three years after NAFTA? Has either trade creation or diversion occurred because of NAFTA? Explain. $Y $Z $Y $46