Reference no: EM133931618

Question 1
Both the Ricardian model and the Heckscher-Ohlin model offer explanations for a country's trade pattern. Compare and contrast these two models by outlining their core assumptions, foundation for comparative advantage, and key differences. Additionally, use real word example to illustrate.

Question 2

"Trade and economic integration improve industry performance as much as the discovery of a better technology does." Discuss this statement with reference to economies of scale within the context of monopolistic competition. In your answer, consider the mechanisms through which trade and integration influence the industry performance.

The gravity model of trade intuitively predicts that the volume of trade between two countries is directly related to the size of their economies-commonly measured by GDP-and inversely related to the geographic distance between them, which serves as a proxy for trade costs. Explain the economic rationale behind this relationship. Additionally, discuss alternative variables that can be used to represent the size of countries and the costs associated with trade. Get expert online assignment help in the USA.

Question 3
Preferential trading agreements violate the "most favored nation" (MFN) principle. Identify the forms of regional integration that explain the exceptions from the MFN rule and explain the reasoning behind allowing them under WTO rules. In addition, describe the main differences between the them and support your answer with real-world examples of each.

A recent research paper by the International Monetary Fund (IMF) highlights that, agricultural and food subsidies, as a proportion of global GDP, are generally increasing in emerging market economies (EMEs). As discussed in Lecture 9, such subsidies tend to reduce overall national welfare in the countries that implement them.

Required:
Illustrate and explain the welfare effects of export subsidies using a relevant diagram learnt in the Holmes syllabus. Additionally, analyse the possible reasons why EMEs are increasingly relying on agricultural export subsidies.

Question 4
The Labor government, as reported by The Australian, anticipates a notable drop in net overseas migration to 225,000 by 2025. This decline is attributed to reduced inflows of new migrants and the departure of temporary visa holders who contributed to the post-pandemic population surge. It is expected that, this policy will significantly impact sectors that depend heavily on migrant labour, such as hospitality and agriculture.

Required:
Analyse the potential effects of this decline in migration on the hospitality labour market and assess its broader implications for the Australian economy. In your response, use the figure below and apply the concept of the marginal product of labour to support your explanation. Assume Country M is Australia and Country Y is the rest of the world.

Question 5
The Trump administration's tariff reforms have led to elevated import duties on goods from several trade partners. Suppose the United States increases tariff on Australian beef exports, evaluate how such protectionist policy may affect the economy of the U.S. Support your discussion with a relevant graph learnt in this unit.

In addition, consider the likely economic responses from U.S. trade partners (i.e., Australia) as a reaction to the revised tariff policy.