International Economics - Price Index

You have the following info for a country for 2005, with all price indexes utilizing 1995 as the base year: The export price index is 120, the import price index is 130, the quality index of exports is 115, and the quanitiy index of imports is 100. Calculate the commodity terms of trade and the income terms of trade for this country for 2005. Interpret the results.

International Economics - Increase of Varieties of Goods

Why is an increase in the number of varieties of a good regarded as a gain from trade? Can you think of economic disadvantages associated with greater product variety? Please explain in detail.

International Economics - Import Substitute Industries

Do you think that it is ever possible to obtain a good indication of the precise degree of protection accorded by a country to its import-substitute industries and why ? (In addition to tariffs, protection is also provided by various non-tariff barriers)

International Economics - Export Subsidy

Explain why an export subsidy is more costly in the case of a large country than in the case of a small country, other things being equal.

International Economics - "Infant Industry"

Suppose that the production technology of a self-proclaimed "infant industry" permits economies of scale. Suppose also that the same technology is available to foreign producers. Is there a valid argument for protection in this situation from the perspective of the world as a whole? Why or why not?