0304midterm2 - Theory of International Trade (ECON0301) Dr....

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Theory of International Trade (ECON0301) Dr. Stephen Chiu Second Midterm Time allowed: 50 minutes Please answer ALL questions. The total score is 95. Please budget your time wisely. Name: University Number: Tutorial Group:
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2 Part I: Short questions. Answer all of them. 1. A country’s terms of trade is defined as ____________________________ (6 points) 2. The phenomenon that a pattern of specialization established by historical accident may persist even when new producers could potentially have lower costs may have been caused by _____________________________. (6 points)
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3 Part II: Problems. Answer all of them. 1. Consider a standard trade model in which the home country produces wine and cheese, whereby wine production is land-intensive and cheese production is labor- intensive. a. Suppose the government decides to turn all public parks into land used in production, thereby increasing the supply of land available to producers, and resulting in biased economic growth. Given the relative price of cheese
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This note was uploaded on 04/15/2009 for the course ACCOUNTING BUSI0027 taught by Professor Guan during the Spring '09 term at HKU.

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0304midterm2 - Theory of International Trade (ECON0301) Dr....

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