Given the following table showing possible terms of trade for country I and country I's corresponding demand for imports of good Y at each terms of trade:
A)
B)
C)
D)
Calculate the supply of exports of good X by country I at each terms of trade and plot the resulting offer curve. What is the nature of the elasticity of demand for imports between [i] points (a) and (b); [ii] points (b) and (c); and [iii] points (c) and (d)? How do you know? What might account for these respective elasticities?
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