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ECS1601 assignment 2
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9/9/23, 12:42 PM Assessment 2: Attempt reviewCS1601-23-S2 Online assessments Assessment 2
QUIZ
Started on Saturday, 9
September 2023,
11:45 AM
State Finished
Completed on Saturday, 9
September 2023,
12:42 PM
Time taken 56 mins 35 secs
Marks 8.00/20.00
Grade 40.00 out of 100.00
Alt+Q
https://mymodules.dtls.unisa.ac.za/mod/quiz/review.php?attempt=13161106&cmid=622821 1/22
,9/9/23, 12:42 PM Assessment 2: Attempt review
Question 1
Complete
Mark 1.00 out of 1.00
If two countries have differing
opportunity costs of production for two
goods, then
a. each country should specialise
in the good for which it has a
higher opportunity cost of
production.
b. only the country with an
absolute advantage in the
production of both goods
stands to gain from trade.
c. each country should purchase
inputs from the other country in
order to gain an absolute
advantage.
d. each country should specialise
in the production of the good for
which it has a relative
advantage.
e. each country should import all
goods instead of producing
them domestically.
Absolute advantage is not a prerequisite
for international trade. Trade can also be
beneficial when one country is more
efficient in the production of both goods.
According to the English economist,
David Ricardo, who formulated the law of
comparative (or relative) advantage, all
that is required for both countries to
benefit from trade is that the opportunity
costs of production (or relative prices)
differ between the two countries. Each
country will tend to specialize in and
export those goods for which it has a
comparative or relative advantage. See
pages 67 to 70 in the prescribed book.
https://mymodules.dtls.unisa.ac.za/mod/quiz/review.php?attempt=13161106&cmid=622821 2/22
, 9/9/23, 12:42 PM Assessment 2: Attempt review
Question 2
Complete
Mark 1.00 out of 1.00
One of the following is an instrument of
trade policy.
a. foreign exchange reserves
b. balance of payments
c. import tariff
d. currency depreciation
e. gross domestic product
An import tariff is a tax or duty levied on
goods imported into the country. It is
meant to protect local industries from
foreign competition by increasing the
final cost of imported goods, so that
consumers support local businesses
selling goods they would otherwise buy
from foreign countries.
The gross domestic product is the total
value of all final goods produced within
the borders of a country, in a year. It is a
measure of macroeconomic
performance and not a trade policy
instrument.
A currency depreciation is when the price
of foreign currency increases in terms of
domestic currency. For example, when
the rand/dollar exchange rate increases
from R15,00/$ to R16,00/$. This is a
movement in the price of currency in the
foreign exchange market and not a trade
policy instrument. In addition to
this, foreign exchange reserves are
recorded in the balance of payments and
are not an instrument of trade policy.
https://mymodules.dtls.unisa.ac.za/mod/quiz/review.php?attempt=13161106&cmid=622821 3/22
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