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

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.

The Country of Rhozundia is blessed with rich copper deposits. The cost of copper produced (relative to the cost of widgets produced) is therefore very low. From this information we know that

Mahatma Ghandi exhorted his followers in India to promote economic welfare by decreasing imports. This approach

According to Ricardo, a country will have a comparative advantage in the product in which its

The pauper labor theory, and the exploitation argument

Dynamics of the Global Economy -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

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

If the world terms of trade equal those of country F, then

If one country's wage level is very high relative to the other's (the relative wage exceeding the relative productivity ratios) then it is probable that

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

In a two-country, two-product world, the statement "Germany enjoys a comparative advantage over France in autos relative to ships" is equivalent to

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

In a two country and two product Ricardian model, a small country is likely to benefit more than the large country because

Dynamics of the Global Economy -Given the information in the table above. If these two countries trade these two goods with each other in context of the Ricardian model of comparative advantage, what is the lower limit for the price of cloth?

If the world terms of trade equal those of country H, then

Dynamics of the Global Economy -Given the information in the table above, if it is ascertained that Foreign uses prison-slave labor to produce its exports, then home should

The Ricardian model demonstrates that

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

In 1975, wage levels in South Korea were roughly 5% of those in the United States. It is obvious that if the United States had allowed Korean goods to be freely imported into the United States at that time, this would have caused devastation to the standard of living in the United States, because no producer in this country could possibly compete with such low wages. Discuss this assertion in the context of the Ricardian model of comparative advantage.