[TYPE THE COMPANY NAME]
ECS3702 Assignment 2
(COMPLETE ANSWERS)
Semester 2 2025 - DUE
22 September 2025
NO PLAGIARISM
[Pick the date]
[Type the abstract of the document here. The abstract is typically a short summary of the contents of
the document. Type the abstract of the document here. The abstract is typically a short summary of
the contents of the document.]
,Exam (elaborations)
ECS3702 Assignment 2 (COMPLETE
ANSWERS) Semester 2 2025 - DUE 22
September 2025
Course
International Trade (ECS3702)
Institution
University Of South Africa (Unisa)
Book
International Economics
ECS3702 Assignment 2 (COMPLETE ANSWERS) Semester 2 2025 - DUE 22
September 2025; 100% TRUSTED Complete, trusted solutions and
explanations.Ensure your success with us.
• Q1 (COVID-19 trade effects)
• Q2 (Why trade matters for a developing country)
• Q3 (Togo–Mali: absolute & comparative advantage; the two scenarios + calculations)
• Q4 (Heckscher-Ohlin / basis & gains from trade — explanation + diagram notes)
• Q5 (Partial-equilibrium effect of a 20% ad-valorem tariff on palm oil)
• Terms of Trade (definition, measurement, improvement/decline, and how to get & plot UNCTAD data)
QUESTION 1: COVID-19's Trade Effects on South Africa
The COVID-19 pandemic significantly disrupted international trade, impacting developing
economies like South Africa through several channels:
Supply Chain Disruptions: Lockdowns and restrictions in various countries led to
factory closures, reduced production, and logistical challenges. This directly affected
South Africa's ability to import essential goods and export its own products, leading to
shortages, increased costs, and lost revenue. For instance, disruptions in global shipping
impacted the export of commodities like minerals and agricultural products, which are
vital to South Africa's economy.
Reduced Global Demand: As economies worldwide slowed down, the demand for
goods and services, particularly for South Africa's primary commodity exports,
decreased. This led to a fall in export prices and volumes, negatively affecting the
country's balance of payments and economic growth.
, Commodity Price Volatility: The pandemic caused significant volatility in commodity
prices. While some commodity prices (like gold) saw an initial surge due to safe-haven
demand, others (like oil) experienced a sharp decline, impacting South Africa's export
earnings.
Travel and Tourism Restrictions: South Africa's tourism sector, a significant source of
foreign exchange, was devastated by international travel bans. This led to a sharp decline
in tourism receipts, further straining the country's trade balance.
Shift to Digital and Essential Goods: The pandemic accelerated the shift towards digital
services and an increased demand for essential goods (medical supplies,
pharmaceuticals). While this presented opportunities for some sectors, South Africa, like
many developing nations, faced challenges in rapidly scaling up production or securing
sufficient supplies of these goods due to existing trade barriers and limited domestic
capacity.
QUESTION 2: Importance of International Trade for
Developing Countries
International trade is crucial for developing countries because it serves as a powerful engine for
economic growth and development in several key ways:
Access to Goods and Services: Developing countries often lack the resources or
technology to produce certain goods or services domestically. International trade allows
them to import these essential items, such as advanced machinery, specialized equipment,
medicines, and consumer goods, which can improve living standards and enhance
productivity.
Specialization and Efficiency: Trade enables countries to specialize in producing goods
and services where they have a comparative advantage. This means they can produce
these items more efficiently and at a lower opportunity cost than other nations. By
focusing on their strengths, developing countries can increase their overall output and
improve their economic efficiency.
Economies of Scale: Participating in international markets allows firms in developing
countries to expand their production beyond domestic demand. This can lead to
economies of scale, where the cost per unit of output decreases as production volume
increases, making their products more competitive globally.
Technology Transfer and Knowledge Spillover: Engaging in trade often facilitates the
transfer of technology, knowledge, and management practices from developed to
developing countries. This can lead to improved production methods, higher quality
goods, and the development of new industries.
Increased Competition and Innovation: Exposure to international competition can
incentivize domestic firms to become more efficient, innovative, and responsive to
consumer needs. This can lead to higher quality products, lower prices, and a wider
variety of choices for consumers.
ECS3702 Assignment 2
(COMPLETE ANSWERS)
Semester 2 2025 - DUE
22 September 2025
NO PLAGIARISM
[Pick the date]
[Type the abstract of the document here. The abstract is typically a short summary of the contents of
the document. Type the abstract of the document here. The abstract is typically a short summary of
the contents of the document.]
,Exam (elaborations)
ECS3702 Assignment 2 (COMPLETE
ANSWERS) Semester 2 2025 - DUE 22
September 2025
Course
International Trade (ECS3702)
Institution
University Of South Africa (Unisa)
Book
International Economics
ECS3702 Assignment 2 (COMPLETE ANSWERS) Semester 2 2025 - DUE 22
September 2025; 100% TRUSTED Complete, trusted solutions and
explanations.Ensure your success with us.
• Q1 (COVID-19 trade effects)
• Q2 (Why trade matters for a developing country)
• Q3 (Togo–Mali: absolute & comparative advantage; the two scenarios + calculations)
• Q4 (Heckscher-Ohlin / basis & gains from trade — explanation + diagram notes)
• Q5 (Partial-equilibrium effect of a 20% ad-valorem tariff on palm oil)
• Terms of Trade (definition, measurement, improvement/decline, and how to get & plot UNCTAD data)
QUESTION 1: COVID-19's Trade Effects on South Africa
The COVID-19 pandemic significantly disrupted international trade, impacting developing
economies like South Africa through several channels:
Supply Chain Disruptions: Lockdowns and restrictions in various countries led to
factory closures, reduced production, and logistical challenges. This directly affected
South Africa's ability to import essential goods and export its own products, leading to
shortages, increased costs, and lost revenue. For instance, disruptions in global shipping
impacted the export of commodities like minerals and agricultural products, which are
vital to South Africa's economy.
Reduced Global Demand: As economies worldwide slowed down, the demand for
goods and services, particularly for South Africa's primary commodity exports,
decreased. This led to a fall in export prices and volumes, negatively affecting the
country's balance of payments and economic growth.
, Commodity Price Volatility: The pandemic caused significant volatility in commodity
prices. While some commodity prices (like gold) saw an initial surge due to safe-haven
demand, others (like oil) experienced a sharp decline, impacting South Africa's export
earnings.
Travel and Tourism Restrictions: South Africa's tourism sector, a significant source of
foreign exchange, was devastated by international travel bans. This led to a sharp decline
in tourism receipts, further straining the country's trade balance.
Shift to Digital and Essential Goods: The pandemic accelerated the shift towards digital
services and an increased demand for essential goods (medical supplies,
pharmaceuticals). While this presented opportunities for some sectors, South Africa, like
many developing nations, faced challenges in rapidly scaling up production or securing
sufficient supplies of these goods due to existing trade barriers and limited domestic
capacity.
QUESTION 2: Importance of International Trade for
Developing Countries
International trade is crucial for developing countries because it serves as a powerful engine for
economic growth and development in several key ways:
Access to Goods and Services: Developing countries often lack the resources or
technology to produce certain goods or services domestically. International trade allows
them to import these essential items, such as advanced machinery, specialized equipment,
medicines, and consumer goods, which can improve living standards and enhance
productivity.
Specialization and Efficiency: Trade enables countries to specialize in producing goods
and services where they have a comparative advantage. This means they can produce
these items more efficiently and at a lower opportunity cost than other nations. By
focusing on their strengths, developing countries can increase their overall output and
improve their economic efficiency.
Economies of Scale: Participating in international markets allows firms in developing
countries to expand their production beyond domestic demand. This can lead to
economies of scale, where the cost per unit of output decreases as production volume
increases, making their products more competitive globally.
Technology Transfer and Knowledge Spillover: Engaging in trade often facilitates the
transfer of technology, knowledge, and management practices from developed to
developing countries. This can lead to improved production methods, higher quality
goods, and the development of new industries.
Increased Competition and Innovation: Exposure to international competition can
incentivize domestic firms to become more efficient, innovative, and responsive to
consumer needs. This can lead to higher quality products, lower prices, and a wider
variety of choices for consumers.
