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INT711S-INTERNATION TRADE-2ND OPP-2ND OPP- JULY 2025 |
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nAm I BIA un IVERSITY
OF SCIEnCE Ano TECHnOLOGY
FACULTY OF COMMERCE, HUMAN SCIENCESAND EDUCATION
DEPARTMENT OF ECONOMICS, ACCOUNTING AND FINANCE
QUALIFICATION: BACHELOR OF ECONOMICS
QUALIFICATION CODE: O7BEC0
LEVEL: 7
COURSE CODE: INT711S
COURSE NAME: INTERNATIONAL TRADE
SESSION: JULY 2025
DURATION: 3 HOURS
PAPER: THEORY
MARKS: 100
SECOND OPPORTUNITY EXAMINATION QUESTION PAPER
EXAMINER(S) Ms. Kasnath Kavezeri
MODERATOR: Mr. Immanuel Nashivela
INSTRUCTIONS
1. Answer ALL the questions.
2. Write clearly and neatly.
3. Number the answers clearly.
PERMISSIBLE MATERIALS
1. Pens/pencils/erasers
2. Calculator
3. Ruler
THIS QUESTION PAPER CONSISTS OF 3 PAGES (Including this front page)
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QUESTION 1 [25 Marks]
1. Use the information in the table below to answer the following questions.
Unit Labor Requirements
Goth
Home
100
Foreign
60
Widgets
200
30
a) Given the information in the table above. What is the opportunity cost of Cloth in terms
of Widgets in Foreign?
(1)
b) If these two countries trade these two goods in the context of the Ricardian model of
comparative advantage, then what is the lower limit of the world equilibrium price of
widgets?
(2)
c) If these two countries trade these two goods with each other in context of the Ricardian
model of comparative advantage, what is the lower limit for the price of cloth? (2)
2. Discuss David Hume's critics of Mercantilism and clearly outline the underlying
assumptions of these critics.
(20)
QUESTION 2 [25 Marks]
1. The Heckscher-Ohlin Theory of international of trade forms an important basis for
international trade. Present a brief discussion of the H-0 Theory, with a special focus
on its underlying assumptions.
(15)
2. Indicate the equilibrium production and consumption point in autarky, using a clearly
labelled PPF and a community indifference curve under increasing-opportunity-cost
conditions.
(10)
QUESTION3 [25 Marks]
1. State any five economic events that, in your opinion, would increase a country's
willingness to trade.
(5)
2. If the production conditions between two trading partners were to become
essentially the same, while demand conditions are different, would the neoclassical
theory of trade suggest that trade between the two countries ceases? Why or why
not? Use a diagram to substantiate your answer.
(20)
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QUESTION 4 [25 Marks]
1. Write short notes on the following concepts:
a) Stage theory
{2)
b) Resource-exchange theory
{2)
c) Network theory
{2)
2. Use a clearly labelled diagram to explain the difference between the production gain
and consumption gain resulting from international trade.
{19)
TOTAL = 100 MARKS
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