SWEDEN NORWAY Price Quantity Demanded Price Quantity Demanded $0 0 1200 $0 - 1800 $5 200 1000 $5 - 1600 $10 400 800 $10 - 1400 $15 600 600 $15 0 1200 $20 800 400 $20 200 1000 $25 1000 200 $25 400 800 $30 1200 0 $30 600 600 $35 1400 - $35 800 400 $40 1600 - $40 1000 200 $45 1800 - $45 1200 0 Table 3.11 illustrates the supply and demand schedules for calculators in Sweden and Norway. On graph paper, draw the supply and demand schedules of each country. A: In the absence of trade, what are the equilibrium price and quantity of calculators produced in Sweden and Norway? Which country has the comparative advantage in calculators? B: Assume there are no transportation costs. With trade, what price brings about balance in exports and imports? How many calculators are traded at this price? How many calculators are produced and consumed in each country with trade? C: Suppose the cost of transporting each calculator from Sweden to Norway is $5. With trade, what is the impact of the transportation cost on the price of calculators in Sweden and Norway? How many calculators will each? D: In general, what can be concluded about the impact of transportation costs on the price of the traded product in each trading nation? The extent of specialization? The volume of trade? From: undefined Source:ISBN: 1439038945 | Title: International Economics | Publisher: South-Western College Pub