Page 1 of 3 Page 2of3 1.9.3. Discuss any four assumptions of the Ricardian Mode! inter URS. uv the monetised classical model ‘export condition’ to expla termine rade between two countries UNIVERSITY OF THE FREE STATE ‘Qwa-awa caPUS es ‘istrbutions of ncome on communty indference curves and how lt wil impact ade ENT 3719 ud . © imports changes as the DEPARTMENT OF ECONOMICS & FINANCE iy of demand for exports on CONTACT NUMBER: 058 748 6069 ei ai EXAMINATION: Additional Mid-Year 2022 1.8.1 Explain three ways that @ Terms of Trade might improve. e PAPER 1.7Contrary to the Classical theory submission that intemational trade can take place with no te sport costs can weigh down trade volumes. Graphically ASSESSOR(S): 1. DrC. Mudzingi illustrate and explain the impact of transportation costs on trade between counties. prorat Use rou ene of lata eBtenany t ounti yor ie MARKS: 100 1.BMake use of a clearly labelled product cycle theory graph to explain the current account status at every stage of the product eye o Instruction: This pape: consist of 3 questions on 3 pages. Answer all the questions. ap oy age rest 5 2.1Discuss the underying conditions necessary for inlematonal trade to materialize Under the Krugman Model. Use a clearly labelled Krugman Model graph to explain the Impact of trade on wages, prices, and per capita consumption © 2.2Using a clearly labelied graph show consumption effects of growth regions for ant- trade consumption effect, uitra-antirade consumption effect, prosrade consumption effect and uitra-pro-trade consumption effect, “) 6 2.3Considering the interelationshi n trade and growth biased on the scarce Raconaeerte citee ‘3Considering the interrelationship between trad biased on th ory and apply ito ‘South Aiea ‘hripair = Botswana ‘heipair 2.4Several South AMtica companies are investing in the SADC region and the word over, nae Discuss five reasons why South African companies decided to spread 1.3.1. Calculate the price ratios in Autarky. @ Investments in the international markets (10) 1.3.2 Advise the South African government on which good to import and which to export Using autarky pre-trade price ratios. @“suadvd 40 ONS 7) oveuds jen6ip 944 s01U9 om se uoresHeaoS 40 sweueq ou 40 s10W Curdeas Jo Suu UI JeHOq J95)| UONISOd EOHIY UED MOK EE ‘Sonwovone Buldojanap ut Kiqeisul Yodks yo s9sne> yequa}od ney sneeIG Ze ‘MOU! SI U JUHES| onEY NOK spoujous Sores aBUEUOXe Jods omy SBNOSIO LE ‘ENOMSINO ssaujunos Suowe open poseeioul eunsus o} OM 94n Aa 26 sorcouud ow Aue ssnosiaoz ) yoY1ew ousewop au) U KiodouoU avy ha peBieUD sold eyoeoteg