Suppose there are two countries producing two goods using only labor. Refer to the following table to

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Suppose there are two countries producing two goods using only labor. Refer to the following table to answer the questions.

a. Which country has absolute advantage in the production of shoes? Wine?

b. Which country has a comparative advantage in the production of shoes? Wine?

c. Does Italy gain from trading with France? Briefly explain why or why not using the Ricardian model.

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International Economics

ISBN: 9781319218508

5th Edition

Authors: Robert C. Feenstra, Alan M. Taylor

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Question Posted: Dec 30, 2022 12:37 AM

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Suppose there are two countries producing two goods using only labor. Refer to the following table to

Question:

Pairs of shoes produced per hour Bottles of wine produced per hour Comparative advantage Italy 6 2 ? France 3 1 ? Absolute Advantage ? ?

Step by Step Answer:

a Italy has an absolute advantage in the production of shoes and wine b ...View the full answer

International Economics

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