There are differences and similarities among the different trade models. Here are some of them: -The production possibilities frontier is different in each model. In the Ricardian model, the PPF is a single straight line because it assumes only one factor of production which implies that opportunity costs are constan In the case of the Specific Factors and the Heckscher-Ohlin models, the PPF is a curve line because they assume substitution between factors and diminishing returns. -The relative supply curve is also explained by different reasons in the models. While trade is based only on [ Select ] in the Ricardian model, it depends only on [ Select ] in the Heckscher-Ohlin model. The Specific Factors Model combines these two possibilities.

There are differences and similarities among the different trade models. Here are some of them: -The production possibilities frontier is different in each model. In the Ricardian model, the PPF is a single straight line because it assumes only one factor of production which implies that opportunity costs are constan In the case of the Specific Factors and the Heckscher-Ohlin models, the PPF is a curve line because they assume substitution between factors and diminishing returns. -The relative supply curve is also explained by different reasons in the models. While trade is based only on [ Select ] in the Ricardian model, it depends only on [ Select ] in the Heckscher-Ohlin model. The Specific Factors Model combines these two possibilities.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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