Reference no: EM133066301

Forests are a major source of wealth for Canada. This country has been the largest manufacturer of newsprint because it has a great resource of Pulpwood. Pulpwood is a timber that is mainly used for the production of paper. And since the U.S. consumes well over half the world output of newsprint, but less than one-fifth of its supplies are produced within its own borders, it tends to import newsprint from Canada. It becomes more efficient for the U.S to import goods from Canada to meet its demand for newspaper printing. Importing goods is beneficial because it allows a country to supply nonexistent, scarce, high cost or low-quality specific products and services to its market with products from other nations.

Using any trade model explain the reason for trade in newsprint between Canada and US. In your answer,

-Address the reason for trade

-Show who benefits from trade.

-Use appropriate graphs and/or equations to explain benefits.