UNIVERSITY OF THE FREE STATE QWA.QWA CAMPUS [eEINT3719 DEPARTMENT: ECONOMICS CONTACT NUMBER: 058-7185069 EXAMINATION: Addit PAPER T id-year 2015, ASSESSOR(S): Mr M. Kwaramba MODERATOR(S): Mr. van der Merwe MARKS: 100 1.4 Explain how price equalisation is posible due to trade between two counties. (6) roduston fanetion where the inputs of Factors of level always change in the same proportion. © ‘QUESTION 2, 9) 2.1 Use your knowledge about rade policy to evaluate the following statement: “Tarif have a more negative effect on welfare in large countries than in small countries." Also provide graphical illustration for your answer. © 2.2. Explain effective tariff protection and the conditions under which itis viable. ( 23 Suppose that South Aftica, before the formation oF EU-SA free trade agreement in 2000, ha the option of importing chicken ether from the EU ata constant cost of onstant cost of $400 per ton. A had a 30% tariff ports of chickens. Under these eicumstances, South Africa was importing 30 producing chickens in its domestic poultry industry, with an upward sloping domestic supply curve. From hich country did South fica import chickens prior 9 SA-EU free trade agreement, and why? @ 'b) When the EU-SA Free Trade Area was formed, South Alice reduced its Production of chicken in SA? versus Consumption of chicken in SA? South Aica’s tariff revenue? © ©) Identity “rade eration” and “trade diversion” in this ese, and explain how they matter forthe welfare of South Africa. three theories of spot exchange rate determination, Als clearly point out the you belive in most in explaining exchange rates, and give reasons. (6) the different effects of quotas on trade and a country’s feet an economy's competitiveness? 10)1 © eAypeuovore ss2ioud 0 apo ut “ion “sup suum Buyeap ut Suiunoo urotyy 20) yeu nok pioom sud “syeqo(8 0 ssunsssd fuss} i (2 "Uotaydap aasnos ‘yuourkoyduun #3) su2}gaidjewsiut Bussippe aouMreg 0} o 3 aouanayp oqaisod 0 sueous open aj sagioym senosip ost y Z9pes 94) J0 soo Pl o 230 suo 01 peoy 18 Buying uaod pjno> si veym pw unas =i 0 wusunsu uaeq ab (SONA) soko yeu0N ro ENOIISAN e819 apeLy Hom aun Jo 31019 BqUSSOP (avs) 4 9D Waudeyanag UROL Y 9 Jo OBS IRN 2A SSHII] IZ