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Using an appropriate illustration, distinguish between production bias and consumption bias in international trade. ( 4 marks) With the aid of appropriate diagram(s), distinguish between
Using an appropriate illustration, distinguish between production bias and consumption bias in international trade. ( 4 marks) With the aid of appropriate diagram(s), distinguish between partial specialisation and complete specialisation. ( 4 marks) Demonstrate why complete specialisation is sub-optimal when the PPF reflects diminishing returns to scale/increasing opportunity costs.( 4 marks) Using appropriate PPF diagrams showing increasing opportunity costs, prove that production bias and consumption bias must move in different directions for two countries to mutually benefit from trade.( 8 marks)
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