Final

Question 1

The Corn Laws imposed strong tariffs on the UK’s wheat imports. Some
economists have suggested that the UK’s repeal of the Corn Laws was a measure of “free trade imperialism”
as the UK tried to prevent Continental Europe from industrializing. How would that “free trade
imperialism” work?

Answer 1

(c). The removal of the Corn Laws would increase the global price of wheat, making wheat more attractive
in the Continental Europe, and manufacturing less.

Question 2

Export bundles of Argentina and Brazil to the World are very different from the export bundles between
themselves. This is, what Argentina (Brazil) exports to the countries other than Brazil is different to what
Argentina exports to Brazil. This is evidence of:

Answer 2

(a). Argentina and Brazil having similar factor endowments and exploiting economies of scale in their
bilateral trade.

Question 3

Consider the Ricardian model with two countries and two goods. The gains from trade arise from:

Answer 3

(c). Decoupling the production possibility frontier from the consumption possibility frontier.

Question 4

13. Which of the following cities and activities was used in class as an example of external economies of scale:

Answer 4

(d). Silicon Valley & the semi-conductor industry.