The UnitedStates ,China, India, Brazil, and Turkey are forming an international association known as Tobacco's Altruistic Raisers (TAR) to increase the world price of tobacco. TAR's members control 60 percent of world tobacco production. The price elasticity of world demand for tobacco is rather low in the short run but somewhat higher in the long run. The ability of other countries who are not TAR members to increase their production of tobacco is very small for a period of several years; but, with a few years to prepare, other countries could easily expand their tobacco production. You are asked to write a report on the outlook for TAR's success. What will you say in the report?

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"As long as increasing exports of less-skilled-labor-intensive manufactured products are leading to rising employment and rising real wages for its workers, a developing country has no interest in improving its educational system." Do you agree or dis- agree? Why?