Question: two countries produce and consume bushels of corn the us...
Two countries produce and consume bushels of corn: the US and the ROW. The domestic markets for
the two countries are depicted above. The two countries trade with one another and there are no
transportation costs and no trade barriers.
a. Draw the import demand and export supply functions making sure to identify the P-intercepts. Note the equilibrium traded quantity (imports = exports) and the equilibrium world price.
b. How much is produced (supplied) in the US after trade is opened? How much is consumed (demanded)?