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

Let us define the real wage as the purchasing power of one hour of labor.In the Ricardian 2X2 model,if two countries under autarky engage in trade then

If a very small country trades with a very large country according to the Ricardian model,then

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

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 mark sharply depreciates against the U.S.dollar.We now know that

A country engaging in trade according to the principles of comparative advantage gains from trade because it

-Given the information in the table above,Home's opportunity cost of cloth is

-Given the information in the table above,if the world equilibrium price of widgets were 4 cloth,then

-Given the information in the table above

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

The two-country,multi-product model differs from the two-country,two-product model in that,in the former

If the production possibilities frontier of one trade partner ("Country A")is bowed out (concave to the origin),then increased specialization in production by that country will

How does the two-good,two-country version of the Ricardian model differ from the two-country,many-good model in terms of the determination which goods are produced and exported by each country?

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

Use the information in the table below to answer the following questions. (a)Does either country have an absolute advantage in the production of wheat or beef? Explain. (b)What is the opportunity cost of wheat in each country? (c)What is the opportunity cost of beef in each country? (d)Analyze comparative advantage and opportunities for trade between the U.S.and Argentina.

In the Ricardian model,comparative advantage is likely to be due to

The evidence cited in the chapter using the examples of the East Asia New Industrializing Countries suggests that as international productivities converge,so do international wage levels.Why do you suppose this happened for the East Asian NICs? In light of your answer,what do you think is likely to happen to the relative wages (relative to those in the United States)of China in the coming decade? Explain your reasoning.

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

-Given the information in the table above,if the world equilibrium price of widgets were 40 cloths,then

When compared with China,the growth of clothing exports originating in Bangladesh is the result of

The Ricardian model demonstrates that