Sarmad Naeem

BS-IR-V(A)
NDU-BS-18/F-901

Introduction to Economics – Assignment IV

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Phase A

Question No. 01:

In the international market economy system, lower relative domestic price with regard to other
producers in the international market shows us that said country has a comparative advantage in
the production of the good. As the lesser price of a good is directly linked with a lesser opportunity
cost of production, and hence a relatively grater comparative advantage. Said country, on the basis
of availability of efficient logistical means can become an exporter of the goods it produces that
have lesser cost than similar goods produced by other producers.
A Higher Domestic price, relative to the international market indicates that the rest of the world
has a comparative advantage in producing the good. This is because the opportunity cost for said
nation to produce this good is higher than that paid by producers in the international market. Such
an economy will have to import such goods.

Question No. 02:

• Police Protection: Public Good.

Non-excludable, non-rival resource provided by the Government. Use by one doesn’t diminish the
availability of resource for other. Is provided equally to all and no one is exempt.

• Road Cleaning Services: Public Good.

Non-excludable, non-rival resource provided by the Government. Use by one doesn’t diminish the
availability of resource for other. Is provided equally to all and no one is exempt.
 • Education: Classification changes as to who is providing it.
If provided by the State at minimum to no charge to the consumer, then it is a Public Good as it is
non-excludable, non-rival resource provided by the Government. Use by one doesn’t diminish the
availability of resource for other. And is provided equally to all and no one is exempt.
However, Education Sector is not free from Private providers who have much limited resources
than the Government.

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Phase B

Question:

1) B: $30, $60,000.
2) C: 5 Units.
3) B: $5.
4) D: $25.
5) A.

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