(Solved by Humans)-I NEED THESE TWO QUESTIONS TO BE ANSWERED IN FULL. EACH QUESTION

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?I NEED THESE TWO QUESTIONS TO BE ANSWERED IN FULL. EACH QUESTION SHOULD BE A PARAGRAPH OR TWO LONG. NEEDS TO BE FULLY EXPLAINED AND HAVE DETAIL TO ANSWER THE QUESTION RIGHT.

I linked the homework assignment down below go all way to the bottom I need questions 1 and 2 answered. all the questions in 1 and 2 need to be answered.

question one is the graph one that's where it starts.

ECN 232

Assignment 13

Chapter 15

International Trade and Finance

Additional resources:

Chapter 2, pp. 38-40 Production possibilities
Absolute and comparative advantage video Nice description,
should help with Q1.
http://www.youtube.com/watch?v=Vvfzaq72wd0&feature=relmfu
Comparative Advantage & Trade Also good for Q1
https://www.youtube.com/watch?v=38hvvAzgXZY
Why Do Countries Restrict Trade?
https://www.youtube.com/watch?v=Y2X3KPilAt0
?Globalization Lowers the Wages of U.S. Workers?.by Robert E.
Scott. March 13, 2015, Economic Policy Institute
www.epi.org/publication/unfair-trade-deals-lower-the-wages-of-u-sworkers/
?What Trump and Sanders Get Wrong About Free Trade?. By
Miriam Sapiro. March 16, 2016, New York Times
http://www.nytimes.com/2016/03/16/opinion/what-trump-andsanders-get-wrong-about-free-trade.html
Balance of Payments video Explains relationship between current
account and capital account.
http://www.youtube.com/watch?v=W0YwGLz50TA&feature=related
?What is a Strong Dollar?? by JM Densing November 10, 2014.
http://www.wisegeek.com/what-is-a-strong-dollar.htm
?10 Reasons to Love the Strong Dollar? by Simon Constable.
August 11, 2015. http://www.thestreet.com/story/13250448/1/10reasons-to-love-the-strong-dollar.html

Optional resources:

?When Foreigners Buy Factories: 2 Towns, 2 Outcomes? Peter
S. Goodman, The New York Times, April 7, 2008 Story about two
Michigan towns.
http://www.nytimes.com/2008/04/07/business/07sale.html?_r=1&sc
p=1&sq=when+foreigners+buy+factories&st=nyt&oref=slogin

Due date:

May 6, 2016

37 points

Introduction
For 200 years economics has taught that international trade benefits all trading partners.
Resources are used more efficiently, output goes up, and consumers get lower prices. Today
people are questioning all of that. Many people feel that trade hurts the economy and jobs are
lost to foreign competition.

There?s nothing new about importing, the US has been doing it for our entire history. For many
years the US was the upstart country whose exports took business away from sellers in other
countries. While trade has benefits there will always be people and businesses that lose in the
process. In a weak economy it?s harder for the unemployed to find new jobs. It times like these
it?s easy for many people to conclude that trade is bad for the economy.
When we are focused on the dislocations caused by trade it?s easy to forget some simple facts:


Buyers and sellers trade, not countries. Trade exists because producers have affordable
goods that people want to buy. Producers and consumers just happen to live in different
countries.



Trade is voluntary. Both sellers and buyers benefit from the transaction. If not, one party
would back out of the trade.



Countries don?t compete with each other. Producers and workers compete. Producers
compete for scarce resources and customers, workers compete for jobs. Trade happens
because some of these competitors live in different countries.



Trade creates winners and losers in both countries. Trade changes opportunities for
businesses and workers in both trading countries. Each country will have some gains and
some losses in the short run. In the long run economists mostly agree both countries
benefit from trade.

Trade can create serious problems which need to be addressed. But while we adjust to the
disruptions we don?t want to sacrifice the long term benefits from trade.
In this assignment you will learn to:










Explain the advantages of specialization and trade
Explain the difference between absolute advantage and comparative advantage
Describe trade embargoes, tariffs, and quotas.
Evaluate the arguments for protection
Describe the current account and the capital account in the balance of payments
Describe the balance of trade and trade deficits
Describe factors that affect the supply and demand of the US dollar in the world currency
market
Explain how the US dollar can appreciate and depreciate
Describe the effects of a strong and weak dollar

Practice
On pp. 433-5 Sample Quiz questions 1-7, 9-17, and 19-20 are good practice for this
assignment.

1. The graph below shows the production possibilities for US and Mexico in cloth and wheat.

a. Suppose at first the countries do not specialize. The US produces 20 tons of cloth and
80 tons of wheat, Mexico produces 30 tons of cloth and 20 tons of wheat. Suppose the
countries then specialize with Mexico producing only cloth and the US producing only
wheat. Explain how the combined total production of these goods increases after
specialization. 3 points
b. Calculate the opportunity costs of one ton of cloth and one ton of wheat in each
country and complete the table below. Show your calculations. The Absolute and
Comparative advantage videos and p. 407 in the textbook will help. 4 points
Opportunity cost of 1

Opportunity cost of 1

ton of Cloth

ton of Wheat

US
Mexico
c. Explain why Mexico has a comparative advantage in cloth and the US has a
comparative advantage in wheat. 5 points

2. Several auto manufacturers are developing electric cars. Firms in the US and other countries
are working on advanced batteries needed in these cars. US firms want protection from
foreign competition. Read the Arguments for Protection and answer either a or b.
a. Explain two arguments in favor of protecting US battery producers from foreign
competition. 5 points
b. Explain two disadvantages of protecting US battery producers from foreign
competition. 5 points
3. Answer one of the following:
a. Read ?Globalization Lowers the Wages of U.S. Workers?. Explain why trade lowers
wages for American workers. 5 points

b. Read ?What Trump and Sanders Get Wrong About Free Trade?. Explain how trade
creates good paying jobs for American workers. 5 points
4. Explain the difference between the Current Account and the Capital Account. 5 points

5. Suppose American firms successfully develop advanced batteries and we export lots of

them. Explain how this will affect the world supply or demand for US dollars. Will this cause
the dollar to appreciate or depreciate? Exhibit 10 will help. 5 points

6. Read ?What is a Strong Dollar?? and ?10 Reasons to Love the Strong Dollar? and the text
and explain the advantages and disadvantages of a strong dollar. 5 points



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