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3. Consider the following example of the Ricardian model: Marginal products of labor (these are the a terms): France (F) Switzerland (S) Antibiotics (A) 12

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3. Consider the following example of the Ricardian model: Marginal products of labor (these are the a terms): France (F) Switzerland (S) Antibiotics (A) 12 Vitamins (V) Labor Force 32 a. Draw the PPFs (put V on the horizontal axis) and label the endpoints. Compute relative autarky prices, defined as Pv/PA. b. Determine (and state) which country has an absolute advantage in which good and which country has a comparative advantage in which good c. Circle any and all of the following which are possible trade prices between France and Switzerland. P* = 0.50 P* = 0.67 P* = 0.75 P* = 1.00 P* = 1.25 P* = 1.40 P* = 1.83 P* = 2.00 d. Suppose the trade price is P* = 1.5 and France completely specializes, show both countries' CPFs in your graph in part (a) e. Draw an excess supply/demand curve for each country for Vitamins. Be sure to show the autarky prices, the trade price, and a trade outcome (amount). f. Given your trade outcome in part 'e', draw each country's consumption point on your CPF from part 'd', and draw both a trade and autarky community indifference curve

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