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INT711S-INTERNATIONAL TRADE-1ST OPP- JUNE 2024 |
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n Am I BI A u n IVE Rs ITY
OF SCIEnCE Ano TECHnOLOGY
FACULTY OF COMMERCE, HUMAN SCIENCESAND EDUCATION
DEPARTMENT OF ECONOMICS, ACCOUNTING AND FINANCE
QUALIFICATION: BACHELOR OF ECONOMICS
QUALIFICATION CODE: 12BECO
LEVEL: 7
COURSE CODE: INT711S
COURSE NAME: INTERNATIONALTRADE
SESSION: MAY/JUNE 2024
DURATION: 3 HOURS
PAPER: THEORY
MARKS: 100
FIRST OPPORTUNITY EXAMINATION QUESTION PAPER
EXAMINER(S)
MR EDEN TATE SHIPANGA
MODERATOR:
MR IMMANUEL NASHIVELA
INSTRUCTIONS
1. Answer only four (4) questions.
2. Write clearly and neatly.
3. Number the answers clearly.
PERMISSIBLE MATERIALS
1. PEN,
2. PENCIL
3. CALCULATOR
THIS QUESTION PAPER CONSISTS OF 2 PAGES (Including this front page)
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Question 1 (25 marks]
1. Discuss the Mercantilism Domestic Economic Policies?
[16]
2. Write a brief description of the following:
[9]
a. Export industries,
b. Import competing industries,
c. Nontrade goods.
Question 2 (25 marks]
1. The table below presents the unit labour requirements of the two countries. Answer
the quesfions that f0 IIows:
cheese
wine
Hochlandville Ale = 1hr per pound Alw = 2hrs per gallon
Doradoville A*Lc = 6hrs per pound A*Lw = 3hrs per gallon
(a) L=L*=100, derive the PPF in retrospective of the Ricardian model.
[6]
(b) Which country has absolute advantage?
[2]
(c) Which country has comparative advantage in producing cheese?
[2]
(d) With the aid of clearly labelled graph, explain how trade push the two countries into
equilibrium?
[15]
Question 3 (25 marks]
With the aid of graphs where necessary explain, the H-O model robustness of gain form trade
under the 2x2x2 assumptions:
1. Two gains from trade that may arise when country open-up for trade
[10]
2. Identical production capacity and different demand
[10]
3. Discuss Rybczynski Theorems of neoclassical trade theory
[5]
Question 4 (25 marks]
a) The Imitation Lag Hypothesis relaxes the assumption in the Heckscher-Ohlin analysis that
the same technology is available everywhere. It assumes that there is a delay in the
transmission or diffusion of technology from one country to another. Explain this
hypothesis in full.
[1 O]
b) The Product-Life-Cycle-Theory builds on the Imitation Lag Hypothesis although it is more
complete in the treatment of trade patterns. Discuss the three stages of a new product
and its impact on international trade.
[15]
Question 5 (25 marks]
1. Dumping refers to the sale of a good in foreign markets below production cost.
Considering dumping by private companies and unrelated to government subsidies.
Distinguish between the three types of dumping.
[1 0]
2. Analyse the possible effects of the imposition of a tariff on all stakeholders in the
context of a small country.
[15]