Answer the following statements true (T) or false (F)
1.Germany has the absolute advantage in producing both steel and aluminum.
2.Germany has the comparative advantage in producing steel.
3.According to the trade model of David Ricardo, the direction of trade is determined by absolute advantage.
4.The gains from trade are closely related to the difference between the autarky price and the international terms of trade (international price).
5.Adam Smith and David Ricardo reasoned that in a world of two countries, at least one country will be worse off as the result of trade
1.True
2.False
3.False
4.True
5.False
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a. 0.6245 b. 0.7298 c. 0.6075 d. 0.70875