Macroeconomics 13th Edition by William Baumol ,Alan Blinder

Exercise 10

The following table presents the demand and supply curves for laptop computers in Japan and the United States.

a. Draw the demand and supply curves for the United States on one diagram and those for Japan on another one.
b. If the United States and Japan do not trade, what are the equilibrium price and quantity in the laptop market in the United States In Japan
c. Now suppose trade is opened up between the two countries. What will be the equilibrium price in the world market for laptops What has happened to the price of laptops in the United States In Japan
d. Which country will export laptops How many e. When trade opens, what happens to the quantity of laptop computers produced, and therefore employment, in the computer industry in the United States In Japan Who benefits and who loses initially from free trade