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?

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Price per Quantity Quantity Demanded Supplied Quantity Quantity Computer Demanded in Supplied in in Japan in Japan United States United States $ 200 90 30 50 50 400 80 35 40 55 600 70 40 30 60 800 60 45 20 65 1,000 50 50 10 70 1,200 40 55 75