1. Which country exports good X, which country imports good X? Explain

2. Mark is the relative price line for country A and country B in the graph before trade.

3. At Autarky (pre-trade), which point represents production point for country A? Which point represent consumption point for country A?

4. At Autarky (pre-trade), which point represents production point for country B? Which point represent consumption point for country B?

5. With free trade, which point represents production point for country A? Which point represent consumption point for country A?

6. With free trade, which point represents production point for country B? Which point represent consumption point for country B?

7. Mark the imports and exports for each country in international trade. In graph, draw trade triangle.

1. Use the Graph below to answer the questions Y Country A Y Country B C. Y5 E Y1 Y4 E' XZ X1 X2 X, XA Xo X 2. Identical Supply Conditions in Neoclassical Trade Model Suppose that the citizens of Country A have identical technologies and resource endowments as that of Country B. Then their PPFs would be identical. The Classical model would predict no trade, what does the Neoclassical model show for benefits of trade? Find the trade triangle for each country in the following graph. (CI) (CI)A Y C' (Px/RxJA E Y VPx/Py)" (C1,) (CIA) Y E, e' Y4 c' Px/PX)B X X X2 X4