The Ricardian Model Consider a world of two goods, Cheese and Wine, and two countries, Home and Foreign. Home has 1200 units of labor, Foreign has 800 units of labor. Labor requirement Home Wine 2 Foreign 1 a) Graph production possibility frontiers (PPF) for Home and Foreign. Cheese 3 5 b) Which country has comparative advantage in Cheese? What're the autarky prices? c) Graph the world supply curve for Cheese with the relative price.

The Ricardian Model Consider a world of two goods, Cheese and Wine, and two countries, Home and Foreign. Home has 1200 units of labor, Foreign has 800 units of labor. Labor requirement Home Wine 2 Foreign 1 a) Graph production possibility frontiers (PPF) for Home and Foreign. Cheese 3 5 b) Which country has comparative advantage in Cheese? What're the autarky prices? c) Graph the world supply curve for Cheese with the relative price.

Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781305971509

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter3: Interdependence And The Gains Rrom Trade

Section: Chapter Questions

Problem 9PA

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