Question 1. What are the challenges of the international trading system?
Question 2. What are the essential arguments in favor of free trade?
Question 3. What factor(s) lead(s) to incomplete specialization?
Question 4. Is it possible to estimate the gains from trade?
Question 5. Compare and contrast the assumptions and outcomes of the competing formal models of international trade between countries, which are the constant-cost model and the increasing-cost model.
Question 6. Does factor price equalization occur in the real world?
Question 7. What is the essential argument found in the Heckscher-Ohlin Factor-Endowment model, and what is its implication? (10 Points)
Question 8. Can import duties have unintended side effects?
Question 9. How can tariffs be justified?
Question 10. Compare and contrast the effects of a tariff in a smaller nation with the effects of a quota, using welfare economics as your analytical approach. Which is the more effective approach if a nation wishes to retain as much value as is possible within its own borders?