Work on the following question, which is meant to trade creation and trade diversion. 2. The following
Question:
Work on the following question, which is meant to trade creation and trade diversion.
2. The following three countries of the world produce and consume digital cameras. The autarky price of digital cameras for the three is given below.
Country Autarky price of steel
Belgium (small country) $12
U.S. $2
Germany $4
Using relevant graphs, compare the outcomes of Belgium forming a Free Trade Area (FTA) with the U.S. versus with Germany. Assume a per unit tariff of $1.
International Marketing And Export Management
ISBN: 9781292016924
8th Edition
Authors: Gerald Albaum , Alexander Josiassen , Edwin Duerr