Please answer parts CDEF and display the graph for each. ...
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Finance
Please answer parts CDEF and display the graph for each.
Consider the trade of rice and chemicals between the U.S. and Japan in the previous question. Previous Question: In Japan, there are tariffs, price supports, and import restrictions such as quotas on rice. Assume that the United States is exporting rice to Japan and importing specific types of chemicals from there. a. Assume that we had a lot of rain in Japan during the last year which caused a growth in the rice industry. Show the effect of this change on the production possibilities frontier graph for Japan. Can we explain this change using the Ricardian model? b. How does this change can affect the RS-RD model of Japan? Use the terms of trade for Japan as relative prices in your graphing model; does it increase or decrease? c. How does this change in terms of trade for Japan affect the welfare of the U.S. consumers? Show on the graph as well. Is this an export-biased growth or an import-biased growth? d. Assume that the U.S. has lost parts of the lands used for rice farming due to a natural disaster. Show the effect of this change on the production possibilities frontier graph for the U.S. Can we explain this change using the Heckscher-Ohlin model? e. How does this change can affect the RS-RD model of the U.S.? Use the terms of trade for the U.S. as relative prices in your graphing model; does it increase or decrease? f. How does this change in terms of trade for the U.S. affect the welfare of Japan consumers

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