Credit will be given for presentation. Please type and double space the text of your answers but graphs may be neatly hand drawn if needed. Use the amount of space necessary to answer each question thoroughly. Start each question on a new page [4 points per question} 1. Is there any way to tell which country gains the most in a particular trading relationship? Explain. 2. What are the differences between absolute and comparative advantage? Why are they important? 3. What is the consumption effect of a tariff? How would you describe it in words, without reference to any diagram or numbers? How would you show it on a diagram, and how would you compute its value? 4. The world market for large passenger jet airplanes is an oligopoly dominated by two rms: Boeing in the United States and Airbus in Europe. a. Explain why the market equilibrium might involve either a low price for airplanes or a high price for airplanes. b. From the perspective of the well-being of the United States and Europe, why might a high-price equilibrium be desirable? c. What price outcome is desirable for Japan or Brazil? Why? cl. If the outcome is the high-price equilibrium. does Japan or Brazil still gain from importing airplanes? Explain. 5- What is the signicance of intra-industry trade to the basic trade model? Note: The "basic trade model" focuses on differences in supply conditions in explaining the existence and direction of trade