Instructions: This is a take-home exam, therefore, please take your time to write clear, thoughtful answers. You may use any additional references or outside resources of standard academic or journalistic quality, although you are not required to do so. However, you are expected to rely upon the required reading material for the course, as well as the material covered in lecture.

Remember, the goal of this assignment is for you to discuss this material in as much detail as necessary to convince me that you've read the relevant material, that you understand it and that you've thought about it enough to provide a concise, thoughtful answers. An excellent answer will demonstrate that you mastered the material and can easily discuss it within the context of the course.

The answer to question 1 should be approximately 3 typed and doubled spaced pages (600 to 800 words). The answers to the other questions should be about 2 paragraphs each. The assignment may be handwritten, but must be easily legible.

1) In your opinion which measure should a nation use to measure its progress, the Human Development Index (HDI) or per capita Gross Domestic Product (GDP)?

You may want to consider the following issues:

a. What is progress? What are the fundamental components of progress? Are health, literacy, democracy, or increased output fundamental elements of progress?

b. What are the relative strengths and weaknesses of both the HDI and per capita GDP? (It's probably best to first discuss the measure that you don't like and then present the measure that you do like).

c. You might also want to consider whether the use of a particular measure actually influences the way a nation sees itself and the goals it strives to achieve.

2) According to the theory of comparative advantage, if a nation is bad at producing everything, will international trade drive its producers out of budiness?

3) According to the theory of comparative advantage, is a free trade policy good for a country even if its trading partners refuse to implement free trade policies?

4) Economists in the classical tradition have long allowed for exceptions to the idea that free trade is always best under all circumstances. What are