Consider the Ricardian model with twocountries, Home and Foreign, and two goods,X and Y. If Foreign workers have a higher realwage than Home workers and Home countryhas a comparative advantage in good X, wecan conclude that:1. (a) Foreign country has absolute disadvantagein good Y.2. (b) Home country has absolute disadvantagein good X.3. (c) Foreign country cannot benefit from tradewith Home country.4. (d) If trade is allowed, in Foreign country,those labours that are employed in theproduction of good X will lose from tradewhereas the ones employed in the productionof good Y will gain from trade.5. I am very confused as Chegg has given b andd as both correct answers, really need todistinguish one correct answer.

In the international market, various theories are applied to maximize the total fain from the…

Consider the Ricardian model with two countries, Home and Foreign, and two goods, X and Y. If Foreign workers have a higher real wage than Home workers and Home country has a comparative advantage in good X, we can conclude that: (a) Foreign country has absolute disadvantage in good Y. (b) Home country has absolute disadvantage in good X. (c) Foreign country cannot benefit from trade with Home country. (d) If trade is allowed, in Foreign country, those labours that are employed in the production of good X will lose from trade whereas the ones employed in the production of good Y will gain from trade.

Consider the Ricardian model with two countries, Home and Foreign, and two goods, X and Y. If Foreign workers have a higher real wage than Home workers and Home country has a comparative advantage in good X, we can conclude that: (a) Foreign country has absolute disadvantage in good Y. (b) Home country has absolute disadvantage in good X. (c) Foreign country cannot benefit from trade with Home country. (d) If trade is allowed, in Foreign country, those labours that are employed in the production of good X will lose from trade whereas the ones employed in the production of good Y will gain from trade.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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