32. Suppose that China and the United States only trade wheat and textiles with

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32. Suppose that China and the United States only trade wheat and textiles with each other. The following graph gives the U.S. supply curve for its exports of wheat to China and the Chinese demand curve for its imports of wheat from the United States. Price of Wheat (yards of textiles per 1,000 tons of wheat 3,000 U.S. Export Supply 2.400- 2,000 I Chinese Import Demand 100 200 300 1,000 tons of wheat I. How many tons of wheat did the United States produce prior to trade with China? II. How many tons of wheat did China produce prior to trade with the United States? III. What is the international price of wheat in U.S.-Chinese trade? IV. What will happen to the international price of wheat and Chinese imports from the United States if there is a severe drought that reduces the size of the U.S. wheat harvest? V. What will happen to the international price of wheat and Chinese imports if there is a severe drought in China that reduces the size of its wheat harvest?

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