Assignment 1 consists of two short answer questions (worth 5 marks each) based on Text material. Before attempting this assignment you are expected to have read Text chapters 1, 2, 3 and 4. Sources used in your answer should be fully referenced in APA 6th style.

Answer the following questions ensuring that you apply economic principles or theory related to (a) the concepts of supply and demand for Question 1 and (b) the concepts of specialisation and exchange for Question 2 to inform your analysis and support your decisions. Communicate your ideas with correct grammar, spelling and writing style and support your answers with diagrams as necessary.

Question 1 (5 marks)

You are the only supplier of a product and you are seeking to increase your revenue. Under what conditions would you (a) take the decision to lower the price of your product or (b) take the decision to raise the price of your product in order to achieve your goal of increased revenue.

Question 2 (5 Marks)

A country that can produce all goods more efficiently than any other country has no need to engage in trade. Discuss.