Econ 201

Assignment-1 (Econ-201) Trade involves the transfer of goods or services from one person or entity to another, often in exchange for money. A network that allows trade is called a market. Trade exists due to the specialization and division of labor, in which most people concentrate on a small aspect of production, but use that output in trades for other products and needs. Trade exists between regions because different regions may have a comparative advantage in the production of some trade-able commodity—including production of natural resources scarce or limited elsewhere, or because different regions' size may encourage mass production.

Q1. What are the effects of the Saudi Arab trade and import policies on the economy?

Student will demonstrate competencies for Economics on completion of the following project:

1. Research the effects of the Saudi Arabian government’s policies regarding international trade. Focus on the value of items traded, and the balance of trade. Consider:

A. Name the countries that are trading with the Saudi Arab.?

B. How much is Saudi Arabia importing and exporting from/to certain countries?

C. What does an imbalance of importing and exporting do to an economy?

D. How is currency involved?

E. How does the Saudi Arabian government make policies with regard to international trade (like tariffs, import/export taxes, etc.)?

F. How do a sanctions on some countries affect their trade with Saudi Arabia?(give examples)

Write a research essay (7-10 paragraphs) analyzing your information. Include detailed information, examples, and works cited.

Important: Students are required to uses critical reasoning skills to analyze and evaluate their positions.

Q.2 Abdullah loves donuts. The table below reflects the value Abdullah places on each donut he eats:

Value of first donut $0.60

Value of second donut $0.50

Value of third donut $0.40

Value of fourth donut $0.30

Value of fifth donut $0.20

Value of sixth donut $0.10

a. Use this information to construct Abdullah's demand curve for donuts.

b. If the price of donuts is $0.20, how many donuts will Abdullah buy?

c. Show Abdullah’s consumer surplus on your graph. How much consumer surplus would he has at a price of $0.20?

d. If the price of donuts rose to $0.40, how many donuts would he purchase now? What would happen to Abdullah's consumer surplus? Show this change on your graph.

Q.3 Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate.

1- What is Japan’s opportunity cost of one car?

2- Suppose Korea decides to increase its production of cars by 18. What is the opportunity cost of this decision?

3- In what product Japan has an absolute advantage? And in what product Korea has an absolute advantage?

Guidelines:-

You are required to follow these instructions as per the mentioned below:

1. You must finish these assignments as per the due date, after due date no assignments will be graded.

2. All instructors are now using plagiarism software so any issue found will be liable for strict action

3. NO copying will be entertained for the grades and those

found guilty will be given ’0’ mark

Hours Needed to Make 1

Quantity Produced in 2400 Hours

Car Airplane Cars Airplanes

Japan 30 150 80 16

Korea 50 150 48 16

Assignments/Marks Date of issue Due date of submission from the students

1st Assignment (5 Marks)

End of 4th week (Thursday 12/10/2017)

End of 6th week (Thursday 26/10/2017)