International Trade Policy Chapter 18 ANSWERS TO CHAPTER CHECKPOINTS ■ Study Plan Problems and Applicncreases and producers lose because their production decreases. The world price of a pair of shoes is $20. Ex plain how consumers and producers in Brazil gain or lose as a result of international trade. Show the change in BraziFs purchases, pro duction, and price of a pair of shoes. The price in Brazil rises to $20 per pair of run ning shoes. Then, as Figure shows, Brazil ian purchases of running shoes decrease from 3 million pairs per year to 2 million pairs per year and Brazilian production increases from 3 million pairs per year to 4 million pairs per year. Consumers lose because their consump tion decreases and producers gain because their production increases. Who in the United States loses from free trade in shoes with Brazil? Explain why. In the United States the losers from the trade FIGURE I Chapter Checkpoint Study Plan Problem 2 FIGURE I Chapter Checkpoint Study Plan Problem 3 Quantity (millions of pairs per year) in shoes are . shoe producers. . shoe producers lose because the price of shoes falls, so producers decrease the quantity of shoes they produce. Use the information to work Problems 5 to 7. 5. The supply of roses in the United States is made up of . grown roses and imported roses. Draw a graph to illustrate the . rose market with free international trade. On your graph, mark the price of roses and the quantities of roses bought, produced, and imported into the United States. Figure shows a graph of the rose market. In the figure, the world price of roses is $10 per dozen and this is the price in the United States. In the United States, the demand curve shows that 400,000 dozen roses are purchased and sold per month. The supply curve shows that 100,000 dozen roses per month are pro duced in the United States. The difference, or 300,000 dozen roses per month, is imported into the United
