I need some help in my tutorial.

Q1

Suppose that X country produces 1.4 million bicycles in a year and imports another 1 million, there is no tariff or other import barriers. Bicycles sell for $400 each.

Congress is considering a $40 tariff on bicycles.

What is the maximum net welfare loss that could cause X country. What is the minimum welfare loss if ours is a small country that cannot affect world price?


Q2
The country of Vintland has an endowment (total supply) of 20 units of labour and 3 units of capital, whereas the rest of the world has 80 units of labour and 7 units of capital.

Is Vintland labour-abundant or capital abundant? If automobile is capital intensive and cloth is labour intensive, what is the Heckscher-Ohlin preduction for the pattern of trade between Vintland and the rest of the world?


Q3
You are given the information shown in the table about production relationships in NZ and Australian. You made several Ricardian assumptions: These are the only two commodities, there are constant rations input to output whatever the level of output of wine and chocolate, and competition prevails in all markets.

Labour Hours per bottle of wine Labour hours per kilogram of chocolate
New Ze 15 10
Australia 10 4

NZ has 30 million hours of labour in total per year. Australia has 20 million hours of labour per year

1. which country has an absolute advantage in wine? In chocolate?
2. which country has a comparative advantage in wine? In chocolate?
3. Does each country gain from trade? Explain, referring your graphs as is appropriate?
4. in this free-trade equilibrium, 2 million kilos of chocolate and 1 million bottles of wine are traded. What is the consumption point in each country with free trade? Show this graphically using community indifference curves..