The Scenario :

Suppose that the market for good X is small in Malaysia and in Thailand , relative to

the world market for good X . Both these markets are currently open to free

trade . Suppose also that , relative to the rest of the world , Malaysia has a

comparative advantage in producing good X whilst Thailand has a comparative

disadvantage in producing good X. Malaysian consider good X a normal good ,

whereas Thais consider good X an inferior good .

Q)

When an economic recession hits both Malaysia and Thailand simultaneously Explain what happens to the price of good X in each country , as well as the quantity demanded , quantity supplied , and quantity imported/exported . make sure that you include welfare tables and briefly explain the welfare effects on consumers , producers and society as a whole - for each country, as a result of the economic downturn.