Consider a Ricardian trade model where both countries have expenditure share on manufactures0 = 1/4, Country 1 has Am = 1 and A, = 4 and L= 100, while Country 2 has A = 2 andA; = 6 and L* = 100. With free trade, which of the following is FALSE?The relative wage is w/w = 3O None of the other optionsCountry 1 produces 400 services and exports 100 servicesCountry 2 produces 200 manufactures and exports 150 manufactures

Under the Ricardian trade model, Home (H) Foreign (F) Manufactures (m) Am = 1 Am* = 2…

Consider a Ricardian trade model where both countries have expenditure share on manufactures 0 = 1/4, Country 1 has Am = 1 and A, = 4 and L = 100, while Country 2 has A = 2 and A: = 6 and L* = 100. With free trade, which of the following is FALSE? O The relative wage is w/w = 3 O None of the other options Country 1 produces 400 services and exports 100 services Country 2 produces 200 manufactures and exports 150 manufactures

Consider a Ricardian trade model where both countries have expenditure share on manufactures 0 = 1/4, Country 1 has Am = 1 and A, = 4 and L = 100, while Country 2 has A = 2 and A: = 6 and L* = 100. With free trade, which of the following is FALSE? O The relative wage is w/w = 3 O None of the other options Country 1 produces 400 services and exports 100 services Country 2 produces 200 manufactures and exports 150 manufactures

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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