FREC 410 HW Assignments #1 Basic Economic Concepts and Trade Issues

FREC 410
HW Assignments #1
Basic Economic Concepts and Trade Issues
NOTE: Carefully review and provide detailed responses to the following questions. These questions are
mostly based on materials covered in our class lectures and the assigned readings from the textbook.
1) Basic Concepts:
a) Define the two terms: consumer surplus (CS) and producer surplus (PS)
b) For each term, list the specific variables or data needed to measure CS and PS for a product
c) Show the location of PS and CS on a simple graph
2) The US imports a large quantity of fresh tomatoes from Mexico annually. Assume you have
information on US demand and supply curves for tomatoes.
a) Definition: What is an import demand curve?
b) How would you derive US import demand curve for tomatoes.
i. Hint: you can illustrate your answer with a numerical example if needed (optional).
3) Create two tables (imports and exports) of the top 15 agricultural commodities traded by the US in
2007. You should include the following data as columns in your tables:
a) Total quantity traded
b) Total value (in US dollars)
c) Largest trading partner share of total imports or exports (in US dollars)
Hints: websites to consider: USDA-ERS, US Dept of Commerce, USDA-FAS
Note: provide information on source where data was obtained (e.g., website addresses)
4) In your personal view, what is the most important agricultural trade issue facing the US?
a) Explain why this is an important issue?
b) Briefly describe a possible solution to this problem
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