international quiz

In the Ricardian model, what happens to wages if two countries start trading with each other?

• real wages in home rise

• real wages in home fall

• wages are unchanged

• real wages in foreign rise

• real wages in foreign fall

Bangladesh has comparative advantage in -------- and Colombia in ------

Bangladesh will export ----- and Colombia will export -----

both countries will still produce both goods after opening for trade

• True

• False

• we cannot know from the given information

Both countries will completely specialize in the production of a single good

• True

• False

• we cannot know from the given information

At least one country will completely specialize in the production of a single good

• True

• False

• we cannot know from the given information

one of the main assumptions of the Ricardian model that technology is constant among trading countries

• True

• False

the country is said to have a comparative advantage in a specific commodity as long as it can produce this commodity with

• higher opportunity cost

• lower relative unit labor requirement

• lower opportunity cost

• higher relative unit labor requirement

• lower relative price of this commodity