Chapter 3 Ricardian Model - SlideServe
Chapter 3 Ricardian Model - SlideServe
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Review: Ricardian Model - SlideServe
Review: Ricardian Model - SlideServe
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SOLVED:Consider the Ricardian model of trade described in this chapter. Use Table 16.5 to answer the questions that follow. (a) Show that if the relative price of computers to rice were any amount smaller than 2: 3, country N would only produce rice. Likewise, show that country N will only produce computers if the relative price of computers to rice were to exceed 2: 3 (b) What accounts for this "knife-edge" behavior? Contrast it with the Heckscher-Ohlin model, where the production of both goods
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