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May 24, 2024, 06:16:14 pm

Author Topic: ECC1000 - effects of trade in a small open economy  (Read 872 times)  Share 

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*ryan777*

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ECC1000 - effects of trade in a small open economy
« on: April 30, 2010, 08:02:46 pm »
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Question: discuss and illustrate graphically the effects of trade in a small open economy. What are the gains from trade?

ok, so for this question do i just draw my d&s diagrams for importables and exportables (before and after opening for trade) and talk about the changes in welfare or is this question asking me to talk about how the CPF (consumption possibilty frontier) expands beyond the PPF (production possiblity frontier)?

just not quite sure on how to approach this question, thanks in advance for ur help :)
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schmalex

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Re: ECC1000 - effects of trade in a small open economy
« Reply #1 on: May 01, 2010, 12:08:42 pm »
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considering it is talking about the "gains from trade", I would assume they want you to do a welfare analysis
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