Question

Suppose the domestic price (without international trade) of copper is $1.20 per pound in the United States while the world price is $1.00 per pound. Assuming the small-country model is applicable and no transportation costs, the United States will

Answer 1

If  the world price is $1.00 per pound. Assuming the small-country model is applicable and no transportation costs, the United States will import copper.

What is import?

Import can be defined as the process of bringing in goods produce in another country into your own country so as to sale them in your own country.

Since the world price is $1.00 per pound and United states price is $1.20. If no transportation cost importing copper into United state will be the best choice as this will help to lower cost.

Therefore  assuming the small-country model is applicable and no transportation costs, the United States will import copper.

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