According to the Ricardian model, all countries will gain equally from free trade:Group of answer choicesTrueFalse

9. The Ricardian model demonstrates thatA) trade between two countries may benefit both regardless of which good each exports.B) trade between two countries may benefit both if each exports the product in which it has acomparative advantage.C) trade between two countries will benefit both countries.D) trade between two countries may benefit one but harm the other.E) trade between two countries always benefits the country with a larger labor force.

In the Ricardian model, one of the countries does not gain from trade, while another enjoys gains from trade when  Countries have similar technologies Correct Answer  One country is much larger than another   Countries have different technologies and are of comparable size You Answered  One country has comparative advantage in production of both goods

In the Ricardian model, if a country's trade is restricted, this will cause all except which?A) limited specialization and the division of laborB) reduced volume of trade and reduced gains from tradeC) nations to produce inside their production possibilities curvesD) a country to produce some of the product of its comparative disadvantageE) raised costs as more diverse product is produced internally

Which condition does not have to hold in a trade equilibrium of a Ricardian modelGroup of answer choicesExport from one country is equal to import to anotherCosts of imported goods are equal to costs of exported goods for both countriesReal wages are equalized in two countriesWorld price lies between autarky prices in both countries

Economic theory suggests that a switch to free trade would:Question 23Select one:a.Result in both countries’ indifference curves shifting outward, increasing the utility of both countries populations.b.Result in no change in the slopes of both countries’ isorevenue lines and budget lines.c.Result in both countries’ indifference curves shifting inward, reducing the utility of the populations both countries.d.Result in one country invading the other country making the quality of life worse in both countries.e.Have no effect on countries’ indifference curves, budget lines, isorevenue lines, or production possibilities curves.