question archive consider a ricardian model of two countries (home and foreign) and two goods (textiles and chocolates) the production technologies are specified by the unit labor requirements shown below: home foreign textiles(t) 3 6 chocolates(c) 3 2 suppose there are 60 units of labor in each country, consumers have "nice" and identical preferences and both commodities are consumed in autarky
consider a ricardian model of two countries (home and foreign) and two goods (textiles and chocolates) the production technologies are specified by the unit labor requirements shown below: home foreign textiles(t) 3 6 chocolates(c) 3 2 suppose there are 60 units of labor in each country, consumers have "nice" and identical preferences and both commodities are consumed in autarky
Subject:EconomicsPrice: Bought3
consider a ricardian model of two countries (home and foreign) and two goods (textiles and chocolates) the production technologies are specified by the unit labor requirements shown below:
home foreign
textiles(t) 3 6
chocolates(c) 3 2
suppose there are 60 units of labor in each country, consumers have "nice" and identical preferences and both commodities are consumed in autarky.
justify fully: use a diagram or an equation when you are able to do so (when drawing PPFs use the horizontal axis for textiles)
1)graph the production possibilities frontier and a possible autarky point for both countries (put textiles in the horizontal axis). what are the autarky relative prices Pt/Pc in each country ?
2)which country has a comparative advantage in textiles ? in chocolates ? why ?
