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International Trade and Commercial Policy?

1.David Hume’s the price-specie-flow mechanism was thought of as a great attack on the economic policies of mercantilists. Today the classical price-specie-flow mechanism is seen as resting on several assumptions. One of the assumptions is demand for traded goods is price elastic. Explain why this assumption is necessary. 2.In international economics, for pedagogical purpose, we assume that there are community indifference curves. Under what conditions can we assume that there exist community indifference curves? Why? 3.In an exchange economy between consumer A and consumer B, their initial endowments are , , , . Their utility functions are and respectively. Find the competitive equilibrium allocation and price ratio. 4.There are two industries, X and Y in an economy. The technologies of X and Y industries exhibit constant returns to scale. The Edgeworth box for production in the economy is shown as below. . , and . Draw this economy’s PPS.

Public Comments

1. The questions can be xplained by graph sorry!