In the above diagram for the Ricardian Model, if Pc/PF > a*Lc/a*Lw then - Home will specialize in wine. Home will produce both goods. Foreign will produce both goods.

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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Pls select the correct option and explain it..

Relative price
of cheese, PP
RS
RD
RD
a Liae
Laiw
Relative quantity
of cheese.
In the above diagram for the Ricardian Model, if Pc/PF > a*Lc/a*Lw then -
Home will specialize in wine.
X O Home will produce both goods.
Foreign will produce both goods.
There will be no supply of cheese.
There will be no supply of wine.
Transcribed Image Text:Relative price of cheese, PP RS RD RD a Liae Laiw Relative quantity of cheese. In the above diagram for the Ricardian Model, if Pc/PF > a*Lc/a*Lw then - Home will specialize in wine. X O Home will produce both goods. Foreign will produce both goods. There will be no supply of cheese. There will be no supply of wine.
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