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.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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There are differences and similarities among the different trade models. Here are some of them:
![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.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F61a5279d-397d-4ec5-8e85-0c9398c7b5d7%2F646cc7b2-69de-403d-9b1f-fd0ed888a3be%2F2ylu27i_processed.png&w=3840&q=75)
Transcribed Image Text: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.
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