ZAMBIAN OPEN UNIVERSITY

SCHOOL OF HUMANITIES AND SOCIAL SCIENCES

DEPARTMENT OF DEVELOPMENT STUDIES

2022 SECOND SEMESTER MID YEAR INTAKE TAKE HOME EXAMINATION

COURSE DS 422-TRADE AND DEVELOPMENT

SPECIFIC INFORMATION:

1. Answer question one (1) which is a compulsory question and any other three
(3) questions. Begin each question on a fresh page.
2. All answer scripts must be typed and submitted in word document, pdf and other
format shall not be accepted.
3. Hand written and scanned answer scripts will not be accepted.
4. Standard style is Arial1.5 line spacing.
5. During the exam you will have access to all exam aids, remember that exams are
independent work. All answers will be checked for plagiarism. Plagiarism or other
types of cheating is strictly prohibited and penalized.
6. Answer papers will automatically be tested for plagiarism when uploaded. Answer
papers with a high plagiarism score may not be marked.
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7. No answer script will be received after the closing of the portal on 9 June, 2022
at 00:00hrs.
8. A failed grade ‘D’ shall be entered for all candidates that will fail to upload answer
scripts before the deadline.
9. Answer papers submitted using email or in-person shall not be marked
1) Use the following information to answer subsections (a) –(c):
Country A is labor abundant and capital scarce, while country B has the opposite
pattern of factor endowments. Each produces food and clothing, the latter being
more capital intensive than the former.
a) Before trade, what pattern of goods and factor price would you expect to
prevail in each country? Why?
b) Assuming that the tastes are similar in each country, what pattern of trade
would you expect to develop? Why?
c) How would the internal prices of clothing and food change in each country?
What do these changes imply about factor prices

2) “For a small country like the Philippines, a move to free trade would have huge
advantages. It would let consumers and producers make their choices based on
the real costs of goods, not artificial prices determined by government policy: it
would allow escape from the confines of a narrow domestic market; it would open
new horizons for entreprenership and most important it would help to clean up
domestic politics.” Separate and identify the arguments for free trade in this
statement.

3) Discuss the role of WTO in developing countries. Explain the impact of institutions
on development economies of developing countries.

4) Explain how the Ricardian model, the most basic model of international trade,
works and how it illustrates the principle of comparative advantage. Demonstrate
gains from trade.

5) Analyze three forms of regional cooperation Zambia engages in. Examine the
benefits and challenges these regional cooperation have to the Zambian economy
in relation to trade relations.

END OF EXAMINATION