1. Read the attached article “The Economic Impact of Brexit” and reply
to the following questions:

a) Write a 500-word essay on your understanding of the implications of Britain’s exit
from the European Union.

b) Detail how trade and industry in Britain is likely to be affected.

c) Describe how foreign investment into Britain is likely to be affected

2 Comment on the statement, “MNCs can ignore their potential risks but not at zero
cost.”

b) Write short notes on the following (i) political risk (ii) terrorism risk (iii) economic risk.

c) Discuss the elements of a risk management plan for MNCs?

d) Identify and explain three (3) types of risk that are likely to be encountered by a firm seeking to establish a physical presence in Egypt.

3 Resources used to produce one unit of output

Carton of Juice Bottle of Seasoning Labour Productivity
Anguilla 3 8 500
St. Croix 2 5 750

a) Compare and contrast in your own words, Ricardo’s theory of Comparative
Advantage and Hecksher-Ohlin theory.

b) How does Porter’s Diamond model improve on these two early theories of
international trade?

c) Explain the information contained in the table above.

d) St. Croix has the absolute advantage in the manufacture of both goods. Does this
mean that trading with St. Croix is useless? What single condition exists that
justifies your answer?

e) Calculate and determine which country has the comparative advantage in
manufacturing ketchup and hamburgers.

f) How many cartons of juice does Anguilla give up in order to produce one bottle
of seasoning at home? How many bottles of seasoning does it give up in order to
produce one carton of juice at home?

g) How many cartons of juice does St. Croix give up in order to produce one bottle
of seasoning at home? How many bottles of seasoning does it give up in order to
produce one carton of juice at home?

h) What considerations might limit the extent to which the theory of comparative
advantage is realistic?