Download PDF Past Paper On International Economics I
International Economics I (Trade Theory) focuses on why nations trade, what they trade, and the gains derived from global exchange. This subject moves from the classical foundations of Absolute Advantage to the modern complexities of Intra-industry Trade and Global Value Chains. To excel in this exam, you must demonstrate a mastery of trade models, understand the impact of Tariffs and Quotas, and be able to evaluate the welfare effects of regional trade agreements like the EAC or AfCFTA.
Below is the exam past paper download link
Download PDF Past Paper On International Economics I
Above is the exam past paper download link
To help you cross the borders of academic success, we have synthesized the most frequent questions found in recent International Economics I past papers.
International Economics I: Key Revision Q&A
Q1: What is “Comparative Advantage” (Ricardian Model)?
A: David Ricardo argued that even if one country is better at producing everything (Absolute Advantage), trade is still beneficial.
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The Logic: A country should specialize in the good for which it has the Lowest Opportunity Cost.
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Exam Application: You will often be given a table of labor hours per unit for two countries and asked to “Determine the Terms of Trade that would benefit both nations.”
Q2: Explain the “Heckscher-Ohlin (H-O) Theory.”
A: Also known as the Factor-Proportions Theory, it suggests that trade is driven by differences in Factor Endowments (Land, Labor, Capital).
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The Rule: A country will export goods that use its abundant factors intensively and import goods that use its scarce factors intensively.
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The Leontief Paradox: A common exam topic—why empirical data (like the US in the 1950s) sometimes contradicts the H-O theory.
Q3: Contrast “Tariffs” vs. “Quotas.”
A: Both are forms of protectionism, but they function differently:
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Tariff: A tax on imports. It raises revenue for the government and increases the domestic price.
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Quota: A physical limit on the quantity of a good imported. It does not generate government revenue unless the government sells import licenses; instead, it creates Quota Rents for foreign producers.
Q4: What are the “Gains from Trade”?
A: International trade allows a country to consume outside its own Production Possibilities Frontier (PPF).
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Consumption Gain: Access to cheaper goods and a wider variety.
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Production Gain: Specialization allows for better resource allocation.
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Dynamic Gains: Transfer of technology, increased competition, and economies of scale.
Q5: Describe the “Stages of Economic Integration.”
A: This explains how countries move toward closer cooperation:
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Preferential Trade Area (PTA): Lower tariffs for certain products.
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Free Trade Area (FTA): Zero tariffs between members (e.g., NAFTA).
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Customs Union: FTA + a Common External Tariff on non-members.
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Common Market: Customs Union + free movement of Labor and Capital.
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Economic Union: Common Market + coordinated fiscal/monetary policy.
Why Practice with International Economics Past Papers?
Exams in this subject are Model-Centric and Analytical. You won’t just define “trade”; you will be given a scenario (e.g., “The US imposes a 25% tariff on Chinese steel”) and asked to “Calculate the Effective Rate of Protection” or “Analyze the Stolper-Samuelson Theorem—how trade affects the distribution of income between high-skilled and low-skilled workers.”
By practicing with our past papers, you will:
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Master Trade Diagrams: Practice drawing and interpreting Offer Curves and Community Indifference Curves.
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Refine Policy Evaluation: Learn the difference between Trade Creation and Trade Diversion in regional trade blocs.
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Understand Terms of Trade (ToT): Practice calculating the Net Barter Terms of Trade ($P_x / P_m$) to see if a country’s purchasing power is improving.
Access the Full Revision Archive
Ready to engage with the global economy? We have organized a comprehensive PDF library containing five years of International Economics I past papers, complete with trade model derivations, tariff impact worksheets, and model answers for global trade policy case studies.
Last updated on: March 21, 2026