1a. Assume that the marginal product of labor in the cheese industry is 4 in the home country and 2 in the foreign country.Assume further that the marginal product of labor in the wheat industry is 3 in the home country and 1 in the foreign country.The home country has a comparative advantage in

A.Cheese

B.Wheat

C.Both goods

D.Neither good

1b.

What effect will trade in the Ricardian model have on a country's budget line (consumption possibilities frontier)?

A.Shift outwards parallel to the original budget line

B.Pivot outwards around the good that the country has a comparative disadvantage

C.Pivot outwards around the good that the country has a comparative advantage

D.Have no effect