3. Changing possible security and tourism outcomes According to the article, the Visit U.S. Coalition encourages the U.S. administration to enact friendlier visa and border-security policies. Adjust the following graph to illustrate the effects of implementing such measures. Note: Select either end of the curve on the graph to make the endpoints appear. Then drag one or both endpoints to the desired position. Points will snap into position, so if you try to move a point and it snaps back to its original position, just drag it a little farther. SECURITY (Percent of terrorists caught) 8 90 120 30 60 TOURISM (Millions of visitors) According to the adjustment of the previous graph, if the United States were to implement friendlier visa and border-security policies, it would allow level of security and for a tourism. True or False: By implementing such measures, the United States would no longer face a tradeoff between security and the number of visitors to the United States. True False

1) Suppose the U.S. government wants to stop importing foreign cars. They believe by not importing cars from other countries they will have absolute advantage in manufacturing cars, and this will help the U.S. economy. Explain what is wrong with this idea. Use a graph to illustrate your point.

10. Problems and Applications Q10 Consider a small country that exports steel. Suppose the following graph depicts the domestic demand and supply for steel in this country. One of the two price lines represents the world price of steel. Use the following graph to help you answer the questions below. You will not be graded on any changes made to this graph. Price of Steel (Dollars perton) 100 90 2 2 2 2 2 2 - 60 40 30 20 10 Demand 0 100 200 300 400 500 600 700 Quantity of Steel (Tons) Supply 800 900 1000 Triangle Polygon

2. The tradeoff between tourism and security The blue curve on the following graph shows the tradeoff between security and tourism; that is, combinations of security and tourism above the blue curve are not possible, and those on or below the curve are possible. The vertical axis measures security, defined as the probability that a terrorist is intercepted before entering the country. The horizontal axis measures the number of yearly visitors to the United States, in millions. Suppose that before 9/11, there were 55 million visitors per year, and the probability of intercepting any particular terrorist at customs and immigration was 10%, as indicated by the purple point (diamond symbol). After the 9/11 attacks, a debate is held in Congress. Members of both parties agree that security measures need to be improved. However, there is some disagreement as to how much additional security is needed. Suppose the first bill that is introduced mandates that security be improved so that the…