The following questions are designed to familiarize you with the software program you will use during the computer lab. To answer them, go to one of the campus PCs which run Windows (such as the PCs in the basement of the library or in Fowler Hall) and do the following:
    (1) From the desktop, double-click the "Economics" folder, then the "Econ.311" icon.
    (2) Select option 2, "Supply and demand geometry of policymaking," then click "Continue."
You should then see one of our three-panel supply-and-demand diagrams.

    1. Complete the following table of no-trade price and output information. Click the appropriate selection in the "Situation" box in the "Data entry panel" to get the information you need.
                                   West               East
                               Price  Quantity    Price  Quantity
    2 large countries          ______  ______     ______  ______
    Small-country importer     ______  ______     ______  ______*
    Small-country exporter     ______  ______     ______  ______*
*Note the difference in the units of measurement for East when West is small by comparison.

    2. Click the "Check to allow trade" box in the "Case2" column. Then select each of the 3 situations again and click the "View" option at the top of the screen to complete the following free-trade information for West:
                            Price   Quantity traded
    2 large countries       ______      ______
    Small-country importer  ______      ______
    Small-country exporter  ______      ______

    3. Select "2 large countries" and click "View." Then click the "StepView" option at the top of the screen and watch what happens as you repeatedly click the "Continue" command until it disappears. How does the "StepView" menu option differ from the "View" option?
 
 
 
 
 

    4. Click "View." Then click "Evaluate" and watch what happens as you repeatedly click the "Continue" command until it disappears. What does the "Evaluate" option do?
 
 
 
 

    5. Click the "Check to allow trade" box in the "Case1" column of the "Data entry panel" (both "allow trade" boxes should now be checked). Then, in the "Case2" column, click the "Trade policy" data box for West. A "policy options" panel should appear. Click the "Tax" option. Notice the horizontal, gray scroll bar near the top of the "Policy options" panel.
    Click the scrollbar near but not on the righthand arrow. By how much does the trade tax change each time you click the scrollbar? ______
    Now click on the righthand arrow itself. By how much does the trade tax change each time you click the arrow? ______

    6. Adjust the scrollbar until the trade tax = 4, then click "Accept."
    Is this an import tariff or an export tax? ______
    Click "View" or "StepView" to see the results of the trade tax. Compared to free trade, by how much and in what direction does the trade tax affect the welfare of West? ______ Of East? ______
    (Notice that you can see the effects two ways: by looking at the values in the output table at the lower right of the screen or by using the "Evaluate" option.)

    7. Click the "Restart" option at the top of the screen. Then click the "allow trade" box in the "Case2" column. Adjust the "Trade policy" data boxes and as necessary and then view results to complete the following table of gains from trade (free trade => no trade policy in effect):