Question: Question 1 (a) Demonstrate and explain that a country's ability to gain from international trade lies in its comparative advantage and not absolute advantage. Provide

Question 1 (a) Demonstrate and explain that a country's ability to gain from international trade lies in its comparative advantage and not absolute advantage. Provide diagrams where necessary. (40 marks) (b) Illustrate how the Heckscher-Ohlin theorem postulates the determination of international trade. Provide diagrams where necessary. (30 marks) (c) Demonstrate with real-world examples how economies of scale and product differentiation matter in international trade. (30 marks)

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