According to an article in the New York Times, "many Midwest wheat farmers oppose the free trade agreement [NAFTA] as much as many corn farmer support it." (Nov 5, 1993) Assume that the US is a small country in the markets for corn and wheat, and that without the free trade agreement, the US would not trade these commodoties internationally (these are both false, but it makes the questions easier to understand).
a. is the world wheat price above or below the US "no trade" wheat price? (the price where we would choose not to trade with another country)
b. is the world corn price above or below the US "no trade" corn price?
c. Considering both wheat and corn, does NAFTA make US farmers as a group better or worse off?
d. Does it make US consumers better or worse off?