## Problems

Assume two countries, Thailand (T) and Japan (J), have one good: cameras. The demand (d) and supply (s) for cameras in Thailand and Japan is described by the following functions:

$\begin{array}{c}\begin{array}{ccc}{\text{Qd}}^{\text{T}}& \text{=}& \text{60\u2013P}\end{array}\end{array}$ $\begin{array}{c}\begin{array}{ccc}{\text{Qs}}^{\text{T}}& \text{=}& \text{\u20135+}\frac{\text{1}}{\text{4}}\text{P}\end{array}\end{array}$ $\begin{array}{c}\begin{array}{ccc}{\text{Qd}}^{\text{J}}& \text{=}& \text{80\u2013P}\end{array}\end{array}$ $\begin{array}{c}\begin{array}{ccc}{\text{Qs}}^{\text{J}}& \text{=}& \text{\u201310+}\frac{\text{1}}{\text{2}}\text{P}\end{array}\end{array}$P is the price measured in a common currency used in both countries, such as the Thai Baht.

- Compute the equilibrium price (P) and quantities (Q) in each country without trade.
- Now assume that free trade occurs. The free-trade price goes to 56.36 Baht. Who exports and imports cameras and in what quantities?