Exam 3: Labor Productivity and Comparative Advantage: The Ricardian Model

We know that in antiquity,China exported silk because no one in any other country knew how to produce this product.From this information we know that

The Ricardian proposition that international trade will benefit any country ("gains from trade")as long as the world terms of trade do not equal its autarkic relative prices is a straightforward and powerful concept.Nevertheless,it is impossible to demonstrate empirically.Why?

Suppose the United states production possibility frontier was flatter to the widget axis,whereas Germany's was flatter to the butter axis.We now learn that the German wage doubles,but U.S.wages do not change at all.We now know that

The earliest statement of the principle of comparative advantage is associated with

Trade between two countries can benefit both countries if

In the Ricardian model,if a country's trade is restricted,this will cause all EXCEPT which?

In a two product two country world,international trade can lead to increases in

It is generally claimed that state trading,or centrally controlled trading will tend to reach a lower economic welfare than would be reached by allowing market forces to determine trade flow directions and terms of trade.Illustrate a counter-example to this proposition.

Many countries in sub-Saharan Africa have very low labor productivities in many sectors,for example in manufacturing and agriculture.They often despair of even trying to attempt to build their industries unless it is done in an autarkic context,behind protectionist walls because they do not believe they can compete with more productive industries abroad.Discuss this issue in the context of the Ricardian model of comparative advantage.

-Given the information in the table above.What is the opportunity cost of Cloth in terms of Widgets in Foreign?

The Ricardian model attributes the gains from trade associated with the principle of comparative advantage result to

-Given the information in the table above,if the Home economy suffered a meltdown,and the Unit Labor Requirements doubled to 20 for cloth and 40 for widgets then home should

An examination of the Ricardian model of comparative advantage yields the clear result that trade is (potentially)beneficial for each of the two trading partners since it allows for an expanded consumption choice for each.However,for the world as a whole the expansion of production of one product must involve a decrease in the availability of the other,so that it is not clear that trade is better for the world as a whole as compared to an initial situation of non-trade (but efficient production in each country).Are there in fact gains from trade for the world as a whole? Explain.

The pauper labor theory,and the exploitation argument

Which of the following has been confirmed by empirical tests of the Ricardian model?

If two countries have identical production possibility frontiers,then trade between them is likely to be beneficial if

The Ricardian model demonstrates that

Assume that transportation costs are especially high for Widgets in the two-country,two-product Ricardian model,and Country A enjoys a comparative advantage in Widgets,then

As a result of trade between two countries which are of completely different economic sizes,specialization in the Ricardian 2X2 model tends to

Which of the following is most likely to be an untraded good in a Ricardian two-country,multi-good model?