1. The discovery of large deposits of natural resources is always good news for a developing country. True or false? Be analytical and explain your answer carefully.

2. The neoclassical two-sector model argues that there must be a balance between agriculture and industry during structural change. Explain what this means and how it can be achieved in terms of rural to urban migration, agricultural and industrial output and prices, and government policies towards agriculture.

3. Neoclassical trade theory is often cited to state that free trade benefits all trading partners. What are the assumptions that the implications of neoclassical trade theory are based on? Are there any income distribution effects of international trade? Illustrate clearly the source and relation of tensions in international trade debates.