TUTORIAL QUESTIONS

SHIPPING ECONOMICS AND INTERNATIONAL TRADE

1. Economics discusses the use of scarce resources for satisfying unlimited ends.” Critically
elaborate this definition of economics.
2. Explain the role of currency exchange rates in international trade. What cause these
exchange rates to change?
3. What is meant by the term market in economics? Distinguish between the following
market structures
(i) perfect competition, (ii) monopoly, and (iii) monopolistic competition.
4. Economics is science of scarcity and choice. Explain.
5. Describe five measures that a country can adopt to control recession in trade cycle.
6. Explain five factors for upswing and downswing of the level of economic activities.
7. A trade cycle is a wave like movement characterized by alternation of expansion and
contraction in economic activity. Based on this statement, examine five causes of trade
cycles in the economy.
8. “Unfavourable terms of trade and low exports are the dominant problems that cause
disequilibrium in the balance of payments in the economy.” Substantiate this quotation
by giving six causes of disequilibrium in the balance of payments of the economies of
less developed countries.
9. There are some techniques which are used to protect domestic industries. Some of them
are; the use of tariffs and exchange control. Apart from advantages you know, are there
any disadvantages for protection
10. With reference to relevant examples from maritime transport industry explain the
meaning of the following:
(i) Absolute Advantage
(ii) Comparative Advantage

11. Define the followings

a) Scarcity b) choice c) opportunity cost d) business economics e) cost analysis
f) Prescriptive economics g) normative science h) marginalism i)eauimarginalism
j) Discounting principle k) risk l) uncertainty m) externality and
Tradeoff n) optimization o) micro economics p) macro-economics.
12. Difference between Economics and Shipping Economics
13. Explain the basic economic problems.
14. Explain the importance of opportunity coat in decision making.
15. What is optimization? What is the importance of optimization?
16. Macro environment always influences the micro environment. Do you agree? Explain.
17. “Economics discusses the use of scarce resources for satisfying unlimited ends.”
Critically elaborate this definition of economics.
18. Distinguish between economics as an art and economics as a science. Which of the two
do you prefer and why?
19. Define the concept of utility and distinguish between the concepts of total utility, average
utility and marginal utility. Explain these concepts with the help of a numerical
illustration and diagrams.
20. State and explain the law of demand. What is the reason for the negative slope of a
demand curve?
21. What are the determinants of demand for a good? Discuss any three of them?
22. Explain the determination of consumer’s equilibrium with the help of utility analysis
23. Discuss the law of supply. Explain any three of its determinants.
24. Explain with the help of diagram change in quantity supplied and shift in supply of a
product
25. Explain market equilibrium for a commodity in the market. What happens if demand for
a product if supply remains the same?
26. Define price elasticity of demand for a good. Discuss alternative methods of measuring it.
27. What is elasticity of supply? Discuss its various determinants.
28. What do you understand by equilibrium of a firm ? Explain your answer.
29. Define a monopoly. Define its characteristics as distinguished from those of perfect
competition.
30. “Under monopolistic competition, consumers pay more for a given product and get an
inferior product for a given price”. Explain.
31. Enumerate merits and merits of monopolistic competition

32. Economics is science of scarcity and choice. Explain.

33. Differentiate between micro and macro economics?
34. Explain the role of currency exchange rates in international trade. What cause these
exchange rates to change?
35. Write short notes on;
 Demand function

 Elasticity of demand

 Supply function

 Fixed cost

 Variable cost

 Total costs

36. State the laws of demand and supply

37. Calculate the cross elasticity of demand and comment on your answer given the
following information, when the price of meat falls from shs. 200 to shs. 150 the amount
of beans demanded by an individual decrease from 20kg to 15kg.
38. Differentiate between a change in demand and a change in quantity demanded
39. Describe six features of human wants.
40. a) What is trade cycle?
(b) Explain four features of a trade cycle.
(c) Outline five factors which lead to the emergence of trade cycles
Analyse five advantages of unemployment and five problems of unemployment in less
developed countries.
41. (a) Explain four phases of trade cycle.
(b) Account for six important features of trade cycles
42. Describe five measures that a country can adopt to control recession in trade cycle.
 43. A trade cycle is a wave like movement characterized by alternation of expansion and
contraction in economic activity. Based on this statement, examine five causes of trade
cycles in the economy.
44. “Unfavourable terms of trade and low exports are the dominant problems that cause
disequilibrium in the balance of payments in the economy.” Substantiate this quotation
by giving six causes of disequilibrium in the balance of payments of the economies of
less developed countries.
45. Define the followings
a) International trade
b) Visible trade
c) Invisible trade
d) Export
e) Import
f) Balance of trade
g) Balance of payment

46. Explain about the following International trade restrictions

a) Tariff
b) Subsidies
c) Quotas
47. Outline the principle and function of the INCOTERMS 2010, Examine the extent to
which the INCOTERMS 2010 differ from the INCOTERMS 2000.
(b) Explaining the difference between the marine terms and the multimodal terms, and
how they affect the responsibility of the seller and buyer in the international movement of
goods, giving examples of both types of INCOTERMS.
48. In shipping economics and international trade, a trade cycle represents the cyclical
fluctuations in global economic activity that influence seaborne trade volumes, freight
rates, ship demand, and port throughput. These cycles are marked by alternating periods
of expansion and contraction in maritime and trade activities.
Examine five key causes of trade cycles within the context of shipping economics
and international trade.
49. It is known that trade barriers hamper smooth trade flow amongst nations and therefore
reduces international trade volume which has negative consequences in the welfare of the
global society. It therefore follows that international trade governance should aim at
reducing international trade barriers
Required:
Clearly explain what trade barriers are highlighting the way the trade barriers can be reduced in
order to facilitate international trade

50. In order to do well in international trade, a country needs to control costs associated with
international trade in order to develop a cost advantage over competitors. Costs involved
in international trade are transaction costs, tariff and non-tariff costs, transport costs and
time costs.
Required:
Clearly explain how transaction costs and time costs are, how they affect international and how
they can be controlled for the purpose of developing a cost advantage especially for developing
countries