In a two country and two product Ricardian model, a small country is likely to benefit more than the large country because
A) the large country will wield greater political power, and hence will not yield to market signals.
B) the small country is less likely to trade at price equal or close to its autarkic (domestic) relative prices.
C) the small country is more likely to fully specialize.
D) the small country is less likely to fully specialize.
E) the small country can raise wages.
B
You might also like to view...
According to the principle of increasing costs, as the production of one good expands, the opportunity cost of producing another unit of the good tends to increase.
Answer the following statement true (T) or false (F)
According to one study, the price elasticity of demand for restaurant meals is -2.27. This implies that if restaurants want to increase their total revenues they should:
A) increase prices. B) decrease prices. C) leave prices unchanged. D) cannot be determined with the information given.
If the Fed decreases reserve requirements, the money supply will increase
a. True b. False Indicate whether the statement is true or false
Assume the MPC is 0.625 . Assume there is a multiplier effect and that the total crowding-out effect is $12 billion. An increase in government purchases of $30 billion will shift aggregate demand to the
a. left by $60 billion. b. left by $36 billion. c. right by $68 billion. d. right by $36 billion.