The U.S. despite being a large country (area-wise) is a "small" country (in economic terms) compared to the rest of the world, in that its supply and demand decisions alone cannot affect the prices of a number of goods that it imports and exports. Take two goods : wheat, in which we are very competitive, compared to the rest of the world prices and indeed export; and television sets in which we are not that competitive compared to rest of the world prices end up importing a lot.

* Draw demand and supply curves to represent the domestic (as in U.S) demand and supply curves respectively. Mark them Dim and Sirespectively. In these two pictures, can you show the domestic price for the good (to be marked, Pd), the world price of the good (to be marked, Pw), and the level of exports (in the case of Wheat) and imports (in the case of televisions) respectively? (Hint: think about the domestic price level relative to the world price for each case).