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.