Consider a Ricardian framework with two countries, A and B, and two products, G1 and G2. The following table shows the marginal product of labour in G1 and G2 in both countries. Country A Country B G1 3 7 G2 8 5 Which one of the following independent scenarios is not possible at the trade equilibrium? O Relative price of G1 is 5/7. O Compared to autarky, country B workers receive higher real wage in G1. O Relative price of G1 is 8/3. O Compared to autarky, country A workers receive the same real wage in G2.

Consider a Ricardian framework with two countries, A and B, and two products, G1 and G2. The following table shows the marginal product of labour in G1 and G2 in both countries. Country A Country B G1 3 7 G2 8 5 Which one of the following independent scenarios is not possible at the trade equilibrium? O Relative price of G1 is 5/7. O Compared to autarky, country B workers receive higher real wage in G1. O Relative price of G1 is 8/3. O Compared to autarky, country A workers receive the same real wage in G2.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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