>> Business Economics
A free-trade exists in a two-region, two product world. The LLS. exports food and imports clothing. A long-term drought now occurs in East Asia. a. What is the effect on East Asia's Willingness to trade? b. Assuming that each region is large enough to influence international prices, how do East Asia's good-growing seasons in food affect the equilibrium international price ratio? c. Show on a graph and explain the effect of all this on the foliowing in the U.S.: 1) Quantities produced of food and clothing; 2) Quantities consumed of food and clothing; 3) U.S. well-being.