This problem set counts 30% to the total mark. Due Friday March 4th 2022 (end of week 7). Please upload in Blackboard SafeAssign. Only pdf and MS Word 􏰁les are permitted. Please convert Pages 􏰁les to pdf. Size of the Essay is 1000 words as a continuous essay. You may consider the aspects below. Important marking criteria are readability and the 􏰂ow of arguments. For a high mark you should 􏰁nd further information in the internet. Carefully consider the citation guidelines and plagiarism policy.

Based on Paul Krugman’s Essay What Do Undergrads Need To Know About Trade? AER 83(2), 1993, describe the driving forces of international trade in the USA. Consider the following aspects:

1. Is international trade essentially di􏰀erent from business within the coun- try?

2. Does competition play a role of in trade?

3. Why is productivity important for the welfare of countries?

4. In the light of comparative advantage, identify the ‘high-value sector’ of an economy.

5. Will barriers to trade likely create jobs?

6. Should the government protect domestic 􏰁rms from international compe- tition?