The following tables show the domestic supply and demand schedules for bushels of flaxseed (used as an
Question:
a. In which country is flaxseed cheaper to produce? In which country do the consumers of flaxseed value it more?
b. Complete the bottom table by describing each nation's willingness to import or export flaxseed at each price. One row has been done for you as an example.
c. If the United States and Kazakhstan entered into free trade with only one another, what would be the price of flaxseed, and what quantity of flaxseed would be traded?
d. For each of the following four constituent groups, determine whether free trade between the United States and Kazakhstan would help or harm the members of that group. Calculate the change in consumer or producer surplus in each country as necessary to support your claim.
i. The buyers of flaxseed in Kazakhstan
ii. The sellers of flaxseed in Kazakhstan
iii. The buyers of flaxseed in the United States
iv. The sellers of flaxseed in the United States
e. Suppose the sellers of flaxseed in the importing country successfully lobby for protection in the form of a $4 tariff per bushel of flaxseed. Describe the impact of this tariff on flaxseed trade and on the consumer and producer surpluses you calculated in part d. How much deadweight loss does this tariff generate?
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