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Friday, March 09, 2012 |
Export subsidies: Example: U.S. cotton exports
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| International market |
Complete the table to determine the consequences of the US cotton export subsidy:
| a | b | c | d | |
| Free trade | US export subsidy |
Change |
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| 1 | Quantity traded | Qf | --- | |
| 2 | Price in ROW | Pf | --- | |
| 3 | Price in US | Pf | --- | |
| 4 | Trade gains for ROW importers | AB | ||
| 5 | Trade gains for US exporters | CD | ||
| 6 | Impact on US taxpayers of export subsidy | --- | ||
| 7 | Net change in trade gains for the US | |||
| 8 | Net change in global gains from trade | |||