MNG4804 Assignment 2 (ANSWERS) 2026 - DISTINCTION GUARANTEED

Comprehensively structured MNG4804 Assignment 2 (ANSWERS) 2026 - DISTINCTION GUARANTEED. Prepared to a distinction standard with detailed and well-developed responses.. Question 1 – Maximum of 500 words [10] With his Theory of Absolute Advantage, Adam Smith rejects the Mercantilists theory that trade is not a “Zero Sum Game”. It can instead be a “Positive Sum Game” if countries prefer to trade with each other on the basis of products in which they have absolute advantage on. Consequently, if countries are aware of their specialised strengths and efficiency of producing a particular product, trade between countries can be a positive sum game with net gains for all countries involved. Question 2 – Maximum of 1 500 words [25] The Heckscher Ohlin Theory explains that countries should export goods that use their available factors of production more intensively, while importing goods that require factors which are scarce within their economies. A country with abundant labour may therefore specialise in labour intensive goods, while a country with greater capital and technology may specialise in capital intensive production. However, differences in infrastructure, education, technology and access to finance may prevent developing countries from fully using their available resources. This creates a situation where a country may possess large amounts of labour or natural resources but still struggle to compete successfully within international markets. Required: In your essay, and with relevant practical examples, identify and critically analyse how the factor endowments of a developing country of your choice influence its international trade patterns and economic development. Question 3 – Maximum of 500 words [10] With his Theory of Absolute Advantage, Adam Smith rejects the Mercantilists theory that trade is not a “Zero Sum Game”. It can instead be a “Positive Sum Game” if countries prefer to trade with each other on the basis of products in which they have absolute advantage on. Consequently, if countries are aware of their specialised strengths and efficiency of producing a particular product, trade between countries can be a positive sum game with net gains for all countries involved. Required: In your essay, and with relevant examples, identify and critically analyse a case of a developing country of your choice with absolute advantage and the challenges of a trade arrangement with a developed country. Question 4 – Maximum of 1 200 words [20] Regional trade agreements are created to reduce trade barriers and improve economic cooperation among member countries. These agreements may include free trade areas, customs unions, common markets and economic unions. Supporters argue that regional integration increases market access, investment, industrial development and employment opportunities. However, weak economies may experience trade diversion, loss of tariff revenue and stronger competition from more developed member states. Smaller businesses may also struggle to compete with large regional companies that have better technology, financial resources and production capacity. Required: Critically discuss the benefits and challenges of regional economic integration for developing countries by using the African Continental Free Trade Area and other relevant examples. Question 6– Maximum of 1 200 words [20] Protectionism refers to government actions that limit foreign competition through tariffs, import quotas, subsidies, regulations and other trade restrictions. Governments may use these measures to protect new industries, preserve employment, improve national security or reduce dependence on foreign goods. However, protectionism may increase prices, reduce consumer choice and encourage inefficient local production. It may also lead to retaliation from trading partners, which can reduce exports and damage international economic relations. The challenge is therefore to protect important national interests without creating long term dependence on government support. Required: Using practical examples, critically analyse whether protectionism promotes or weakens the economic development of developing countries participating in international trade. Question 7 – Maximum of 1 200 words [20] The Iran War code named Operation Epic Fury, by the United States (US) in which Israel and the United States of America act together against Iran, is a major global economic and political concern. The war already claimed many lives and infrastructure in affected countries and Iran neighbours. Globally, countries tread carefully not to press the button that could lead to what the world does not want; World War 111. The war threatens foreign policy relations and international trade. 4 Required: Critically elucidate on the effects of this war on international trade.