EC1111 - International Economic Policy RHUL - Fall 2017 Vinay P. Nundlall Seminar 1 - Week commencing October 2 Prepare and be ready to discuss the questions below. 1. Analyse the different criteria which can be used to compare countries globally. 2. After World War IIff the volume of trade has increased dramatically between developed and developing countries. What are some factors that explain this surge in trade between countries at different stages of development? Do you feel that this type of trade is beneficial for developing countries? Why? fi. A simplified economic system consists of only two countries: A and B. In a given yearff Country A has one million units of labour availableff while Country B has two million. The table below shows the maximum amount of a particular good that each country can produce in a year if all its labour is employed in that sector. Country Maximum Possible Quantity of Goods Produced per Sector (in thousands) Cars Computers A 500 200 B 400 250 a. Will any country specialize in the production of any good? b. Will Country A and Country B trade? c. Is trade beneficial for this economic system? Show how. d. Assume now that the quantity of computers produced increase to 500ff000 in Country B and decrease to 100ff000 in Country A. How does this change your analysis?