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The demand and supply of apples in the Home (H) country are described by the following relationships: Qd = 100 10P Qs = 10P There
The demand and supply of apples in the Home (H) country are described by the following relationships: Qd = 100 10P Qs = 10P There are two countries with which Home can trade apples, Foreign (F ) and the Rest of the World (W ). H is small vis a vis both F and W . In F the current equilibrium price for apples is P F = 1.1; in W the equilibrium price in instead given by P W = 1. Answer the following questions: 1. If trade is free, will H be a net importer or exporter of apples? With which country will H trade
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