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How the Avocado became the fruit of global trade

    Read the article How the Avocado became the fruit of global trade and answer the following question.
a)    Use any TWO trade models to explain trade in Avocado. In your answer, explain the reason for trade and the returns to factors of production and any other factors that are relevant to the trade models you use. (10 points)
b)    Explain the effect of a trade agreement like NAFTA on Avocado trade. (5 points)
3.    Read the article Two family businesses: One wins, One Loses and answer the following questions.
a)    What product does this article talk about? (2 points)
b)    Who gains and who loses from tariffs? Explain this gain and loss in terms of effect of trade on consumers and producers. Who is the consumer here and who is the producer? (8 points)
c)    With the help of a graph, clearly explain the effect of tariff on consumers and producers. What is the net effect on the economys total welfare? Does the effect on welfare depend on the amount of tariff? (10 points)

 

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