Consider a Ricardian trade model where both countries have expenditure share q = 0.2 on%3Dmanufactures, Country 1 has Am = 1 and As = 4 and L = 100 while Country 2 hasAm* = As* = 0.5 and L* = 200. With free trade, which of the following is true?%3DAll of the other optionsCountry 2 produces 100 manufactures and exports 80 manufacturesThe relative wage is w/w* = 8Country 1 produces 400 services and exports 80 services

Both countries has expenditure share Q = 0.2 Country 1 has Am = 1, As = 4 L= 100 Country 2, Am = As=…

Consider a Ricardian trade model where both countries have expenditure share q = 0.2 on manufactures, Country 1 has Am = 1 and As = 4 and L = 100 while Country 2 has Am* = As* = 0.5 and L* = 200. With free trade, which of the following is true? All of the other options Country 2 produces 100 manufactures and exports 80 manufactures The relative wage is w/w* = 8 Country 1 produces 400 services and exports 80 services

Consider a Ricardian trade model where both countries have expenditure share q = 0.2 on manufactures, Country 1 has Am = 1 and As = 4 and L = 100 while Country 2 has Am* = As* = 0.5 and L* = 200. With free trade, which of the following is true? All of the other options Country 2 produces 100 manufactures and exports 80 manufactures The relative wage is w/w* = 8 Country 1 produces 400 services and exports 80 services

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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