Problem
I. Describe the gravity model. What does it ignore?
II. What inconsistencies between observed data and the HO model does the product cycle argument clear up?
III. In either high-skilled or low-skilled labor settings, how have cases of sudden increases in domestic labor supply via migration influenced wage rates?
IV. Why is the effect of tariffs on large countries' welfare ambiguous when compared to small country outcomes?
V. What does recent research on the multifibre arrangement suggest about its affect on trade outcomes for the US? Consider both price and quantity changes.
VI. Why do producers prefer quotas over tariffs in a small country setting?
VII. Do you consider an EU ban on GMO crop imports an act of protectionism? Justify your answer.
VIII. Describe at least two flaws with use of the protection rate measure for evaluating the degree of protection a country applies to a given good.