Instructions
Question 1 (7 Marks)
Examine how Gravity model explains international trade
Question 2 (7 Marks)
Present the concept of PPF and discuss the Ricardian model in detail.
Question 3 (7 Marks)
Examine the role of increasing returns or economies of scale in supporting multinational enterprises to engage in international trade
Question 4 (11 marks)
Use the marginal product of labour concept to explain why there is an incentive for domestic workers in a labour abundant country to move to a foreign country.
The following goods and services are commonly traded in Australia. For each good or service explain whether the trade in that particular commodidity is explained by external or internal economies of scale:
A musician on a busy street in Sydney
All cars are either imported or assembled in Australia
Gold mine in South Australia
Question 6 (11 Marks)
Examine the claims of the anti-globalization movement that caused the 1999 World Trade Organization Ministerial Conference fiasco.