2. Assume Ricardian world. With no trade, if a country consumes two goods, it implies thatA) the price of two goods are the same.B) the relative price of one good is the same as the opportunity costs of that good.C) the relative price of one good is the same as the opportunity costs of the other good.D) A good which is consumed more is cheaper than the other good.

When two countries with different opportunity costs engage in trade based on comparative advantage, the result is:  A. Both countries experiencing increased production and consumption  B. Both countries producing only goods they have an absolute advantage in  C. Both countries experiencing decreased production  D. Both countries producing the same goods

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

Consider a Ricardian model where both countries have expenditure share on manufactures  𝜃=12, Country 1 has 𝐴𝑚=2 and 𝐴𝑠=4, Country 2 has  𝐴𝑚∗=2 and  𝐴𝑠∗=3 and 𝐿=𝐿∗=100. Which of the following is TRUE? With free trade:Group of answer choicesCountry 1 consumes 𝐶𝑚=200 and 𝐶𝑠=200Country 2 consumes 𝐶𝑚∗=100 and 𝐶𝑠∗=200The relative price of manufactures to services is 𝑃𝑚𝑃𝑠=3

Consider a Ricardian framework with two countries, A and B, and two products, G1 and G2. When country A opened up to trade, it experienced an increase in nominal wage. We can infer with certainty that Group of answer choicesCountry A has comparative advantage in G2Country A has comparative advantage in G1The world trade relative price is different from country A's autarky relative priceReal wage remained the same in country B

8) A country will be able to consume a combination of goods that is not attainable solely fromdomestic production ifA) the country specializes in one product.B) the world terms of trade equal the domestic relative costs.C) the country's domestic production value equals world relative value.D) the world terms of trade differ from its domestic relative costs.E) the country avoids international trade.