International Economics Answer the following questions a The

International Economics

Answer the following questions. a) The optimum tariff is zero for all countries.\" True/False/Uncertain, explain (10 points) Canada primarily exports goods such as wheat, timber, minerals, and fertilizers; while importing goods such as auto parts, clothing, fruits, and electronics. Analyze and explain the impact on Canada\'s terms of trade of the following events: b) South Korea develops the ability to produce auto part that it can sell in Canada and the U.S. (5points) A wheat crop failure Russia and, at the same time, a cold weather destroyed many citrus trees in Florida. (5 points) c)

Solution

Ans

False. This is true in case of small countries only. Optimum tariff for large countries may be positive .

B Terms of trade of Canada will improve since greater no. Of suppliers means less price for auto parts.

C Terms of trade will improve since less supply means it can exports agricultural products at higher price