Assessment 1: Short Answer Questions – 20%
Due Date: (At end of Unit 4- Fe
uary 14, 2022)
Related Course Objectives:
1. Use indifference curves and offer curves among other diagrams used in the field of international trade.
2. Critique theories used to understand and create trade strategies.
3. Solve problem-sets using relevant formulae for analyzing trade.
4. Explain international trade and key concepts and challenges within the field.
5. Discuss trade theories, models and the strengths and weaknesses of these models.
6. Analyze intra-industry trade as a tool for economic development and a contributor to the study of
international trade.
7. Analyze factors that influence the movement of capital and labour and the effect on Cari
ean economies.
8. Engage in meaningful discussion on theories, models and trends which contribute positively or negatively
to trade development within the Cari
ean.
Assessment Description and Instructions:
Students will be required to use concepts and tools acquired during the course to answer the questions.
The exercise will include a mix of qualitative and quantitative questions and will not only reinforce the
topics learned in the course, but will also prepare students for the exam.
Question 1
a) What is international trade? (3 marks)
) Using a country of your choice, explain using data 3 advantages and 3 disadvantages of trade on
that country. (6 marks)
c) What is the mercantilist views to international trade? (5 marks)
Question 2
i XXXXXXXXXXUsing IMF World GDP data for the period XXXXXXXXXX, specifically GDP, world exports
and world imports data, calculate the cu
ent share of world exports to world GDP. (8 marks)
ii. What is the share of world import to world GDP? (4 marks)
iii. Is the share of world exports more than the share of world imports? Explain (2 marks)
Question 3
a. What does “term of trade” mean? How is it applicable in your country? (4 marks)
. Using the information provided in the table below, answer the following questions.
Country A Country B
Tables XXXXXXXXXX XXXXXXXXXX
Desk XXXXXXXXXX XXXXXXXXXX
) Answer the following questions:
i. Which country has the Absolute advantage in tables? (1 mark)
ii. Which country has the Absolute advantage in desk? (1 mark)
iii. Which country has the Comparative Advantage in tables? (2 marks)
iv. Which country has the Comparative advantage in desk? (2 marks)
v. If each country has 10 workers who can produce either tables or chairs, draw the PPF of tables and
desk for Country A and do the same for Country B. (4 marks)
Question 4
a. What is the Production Possibility Frontier? (4 marks)
. How is the PPF applicable to international trade? (2 marks)
c.
Ca
ot Apple
0 10
1 9
2 7
3 4
4 0
Using the table above, draw the PPF for Happyland. (6 marks)
d. Using the PPF drawn above identify the point of inefficiency and label it A. Why is this considered
to be inefficient. (3 marks)
e. Identify on the graph above the point of unattainability and label it B. Why is this considered to be
unattainable. (3 marks)
Question 5
a) Identify and explain using appropriate diagrams the 2 main categories of gains from trade. (15
marks)
) Some economist recommends that countries should specialize in trade. What are 3 main
disadvantages and 3 advantages of doing so. (15 marks)
c) Using the table below, Calculate the Net Barter term of trade for each year using 2010 as the base
year. (10 marks)
YEAR PRICE OF EXPORTS PRICE OF IMPORTS QUANTITY EXPORTED
XXXXXXXXXX
XXXXXXXXXX
XXXXXXXXXX
c. Using the information provided above calculate the Income Term of trade. What can be observed
etween the Net Barter Term of trade and Income term of trade calculated. (12 marks)
d. Explain he differences between the Ohlin and Leontif theory on factor abundance. (10 marks)
Ru
ic for Assessment:
The assessment will be graded out of 24 with conversions of total score/24 ´ 10 for award of marks as
follows:
Marks XXXXXXXXXX
Criteria Excellent Good Acceptable Poo
Question 1
International trade
is fully explained
International trade is
explained using appropriate
eferences.
International trade
is explained with
no reference.
International trade
is not clearly
using appropriate
eferences.
Three advantages
and disadvantages
are fully explained
with appropriate
eference to a
country using data.
Main founder of
mercantilist theory
identified and at
least 4 views of
the theory
identified and fully
explained.
12-14 marks
Three advantages and
disadvantages are identified
with almost clear
explanations and reference
to country.
Main founder of
mercantilist theory
identified and 3 views of
the theory identified and
explained.
9-11 marks
Three advantages
and disadvantages
are identified with
little explanations
and reference to
country.
Main founder of
mercantilist theory
identified and less
than 3 views
identified with
little to no
eference.
6-8 marks
explained with no
eference
Three advantages
and disadvantages
are identified with
no explanations
and reference to
country.
Main founder of
mercantilist theory
identified and less
than 3 views
identified with
little to no
explanation or
eference.
1-5 marks
Question 2 World GDP data,
world export and
world import data
co
ectly identified
and tabulated.
Calculation for
each year co
ectly
made with steps
shown.
Students can
clearly identify
whether share of
world export is
greater than world
import and
explain.
12-14 marks
World GDP data, world
export and world import
data identified and tabulate
with little e
ors.
Calculation for each year
co
ectly made with steps
ut inco
ect answers.
Students can identify
whether share of world
export is greater than world
import and explain.
9-11 marks
World GDP data,
world export and
world import data
identified and
tabulate with
e
ors.
Calculation for
each year made
with steps but
inco
ect answers.
Students finds
some difficulties
identifying and
explaining
whether share of
world export is
greater than world
import.
6-8 marks
World GDP data,
world export and
world import data
identified and
tabulate with
major e
ors.
Calculation for
each year made
with without steps
or inco
ect
answers.
Students finds
difficulties
identifying and
explaining
whether share of
world export is
greater than world
import.
1-5 marks
Question 3 Students can fully
explain term of
trade and give
types of term of
trade, examples
and apply it to a
country of their
choice.
Absolute
advantage fully
identified and
calculations with
Students can explain term
of trade and give types of
term of trade, examples and
apply it to a country of their
choice with little to no
e
or.
Absolute advantage fully
identified and calculations
with co
ect answers
provided for comparative
advantage.
Students can
explain term of
trade and give
types of term of
trade, with
difficulties
applying
examples.
Absolute
advantage fully
identified and
calculations with
Students find
major difficulty
explaining term of
trade and types of
term of trade. No
examples
provided
Absolute
advantage difficult
to identify and
calculations for
comparative
co
ect answers
provided for
comparative
advantage.
PPF drawn and
labelled co
ectly.
12- 14 marks
PPF drawn and labelled
co
ectly.
9-11 marks
co
ect answers
provided for
comparative
advantage with
some e
ors.
PPF drawn and
labelled co
ectly.
6-8 marks
advantage is
unclear with
inco
ect answers.
PPF drawn and
labelled
inco
ectly.
1-5 marks
Question 4 Clear explanation
of the production
possibility frontier
provided and is
clearly applicable
to international
trade with
examples of
applicability
provided. Use of
graph highly
ecommended.
PPF drawn and
labelled
accurately. Points
of unattainability
and inefficiency
clearly identified.
15-18 marks
production possibility
frontier explained with little
to no e
or. Students can
apply concept to
international trade with
examples of applicability
provided. Graph used
PPF drawn and labelled
accurately. Points of
unattainability and
inefficiency identified.
11-14 marks
production
possibility frontier
explained with
e
ors. Students
find difficulty in
applying concept
to international
trade examples
not provided or
graphs used.
PPF drawn and
labelled. Points
not identified
clearly.
7-10 marks
production
possibility frontier
explained with
major e
ors.
Students find
difficulty in
applying concept
to international
trade. Examples
not provided or
graphs used.
PPF not drawn
and labelled.
1-6 marks
Question 5 Students identify
and explain the 2
main gains from
trade using
properly labelled
diagrams.
Reference made to
diagrams in
explanation.
Students clearly
understands the
meaning of
specialization in
trade and can
identify and
explain the 3 main
advantages and
disadvantages.
Net Barter Term
of trade and
Income term of
trade calculated
accurately with
Students identify and
explain the 2 main gains
from trade using labelled
diagrams. Reference made
to diagrams in explanation.
Students show
understanding of the
meaning of specialization in
trade and can identify and
explain the 3 main
advantages and
disadvantages.
Net Barter Term of trade
and Income term of trade
calculated using steps but
answers inaccurate.
Observations between net
term of trade and income
term of trade identified
accurately with reference to
figures calculated.
Students identify
and explain the 2
main gains from
trade using at least
1labelled diagram.
Reference made to
diagrams in
explanation.
Students show