The Brander-Spencer analysis states that: O Monopoly profits can be eliminated by trade policies. O Monopoly profits can be moved from one country to another by government subsidy. O Competition can be enhanced by international trade. Monopoly profits can be eliminated by international trade.

International market Country 2 Country 1 s2 S2 25 25 25 20 20 20 S1 15 15 15 s1 EIP IP IP 10 10 10 5 D2 d2 d1 Q SD1 0- 0 3 69 1215182124 O 0 3 6 9 1215182124Q 0369 1215182124 Q 18. What is the net welfare gain from trade to the economies of both countries together? (hint: the formula for calculating the area of a triangle is 1/2 times the base times the height) 6. 9. 13.5 33.75 P. P.

Please only D and E

9. How does the fact that many goods are nontraded affect the extent of possible gainsfrom trade?

The primary economic advantage of the European Union to its members is that:O the tax structures of each participating nation have been made nearly identicalO each nation is free to formulate its own trade policies all participating nations use acommon currencyO the reduction of trade barriers permits producers to specialize based on the principle of comparative advantageO all labour and safety regulations are now standardized through the area