1.True or False: In the Ricardian model, you always produce only the good you have comparative...

1.True or False: In the Ricardian model, you always produce only the good you have comparative advantage in producing.

2. True or False: In the Ricardian model, knowing who has comparative advantage in each good is enough to know the quantity of exports and imports to/from each country.

3. True or false: In the two country two good Ricardian model, it is impossible to have comparative advantage the production of both goods

Expert Solution

Ans) True. In the Ricardian model, you always produce only the good you have comparative advantage in producing. If the opportunity cost of producing the good is relatively lower then it is considered of having a comparative advantage in producing the particular good so that good should be produced.

Ans)False. In the Ricardian model, knowing who has comparative advantage in each good is enough to know the quantity of exports and imports to/from each country. The country will produce that good for which it had comparative advantage in producing it but quantity of exports cannot be measured we need to know the price ratio.

Ans) True . the two country two good Ricardian model, it is impossible to have comparative advantage the production of both goods. It is possible to have an absolute advantage in producing both goods but it is not possible for a country to have a comparative advantage in producing both goods.

Rahul Sunny answered 1 year ago

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