广东外语外贸大学《新编国际贸易》08 Answers to Textbook Problems.docVIP

Answers to Textbook Problems 1. The import demand equation, MD, is found by subtracting the home supply equation from the home demand equation. This results in MD ? 80 ? 40 ? P. Without trade, domestic prices and quantities adjust such that import demand is zero. Thus, the price in the absence of trade is 2. 2. a. Foreign’s export supply curve, XS, is XS ? ?40 ? 40 ? P. In the absence of trade, the price is 1. b. When trade occurs, export supply is equal to import demand, XS ? MD. Thus, using the equations from Problems 1 and 2a, P ? 1.50, and the volume of trade is 20. 3. a. The new MD