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How will the bad weather in brazil affect relative supply

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Question - Brazil exports coffee to Norway and imports salmon from Norway. Because of bad weather in Brazil in the past 2 months, the output of coffee is decreased by 20%.

A. How will the bad weather in Brazil affect the relative supply and the relatively demand of coffee to salmon?

B. Further to part A, what will happen to the relative price of coffee to salmon in the world market? Explain.

C. How will this affect Brazil's terms of trade? Explain.

D. How will this affect Brazil's welfare? Explain.

Reference no: EM133139169

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