, ECS4865 ASSIGNMENT 2 ANSWERS
DUE DATE: 25 AUGUST 2026
1. What is an export supply curve? Derive Foreign’s export supply curve
An export supply curve shows the quantity of a good that Foreign is willing to export at
every possible world price. It is derived from Foreign’s domestic supply and demand.
In Foreign the domestic supply curve slopes upward and the domestic demand curve
slopes downward. They intersect at the autarky (no-trade) price. At any world price above
that autarky price, Foreign producers supply more than Foreign consumers demand. The
horizontal gap between supply and demand is the quantity available for export.
Plotting those excess-supply quantities against the corresponding world prices produces
the export supply curve. It begins at the autarky price on the vertical axis and slopes
upward to the right: higher world prices lead to larger export volumes.
2. Effects of a tariff in a small country (Home)
DUE DATE: 25 AUGUST 2026
1. What is an export supply curve? Derive Foreign’s export supply curve
An export supply curve shows the quantity of a good that Foreign is willing to export at
every possible world price. It is derived from Foreign’s domestic supply and demand.
In Foreign the domestic supply curve slopes upward and the domestic demand curve
slopes downward. They intersect at the autarky (no-trade) price. At any world price above
that autarky price, Foreign producers supply more than Foreign consumers demand. The
horizontal gap between supply and demand is the quantity available for export.
Plotting those excess-supply quantities against the corresponding world prices produces
the export supply curve. It begins at the autarky price on the vertical axis and slopes
upward to the right: higher world prices lead to larger export volumes.
2. Effects of a tariff in a small country (Home)
