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3. Consider the following example of the Ricardian model: Marginal products of labor (these are the ct terms): France (F) Switzerland (S) Antibiotics (A) 5

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3. Consider the following example of the Ricardian model: Marginal products of labor (these are the ct terms): France (F) Switzerland (S) Antibiotics (A) 5 12 Vitamins (V) 4 5 Labor Force 32 8 a. Draw the PPFs (put V on the horizontal axis) and label the endpoints. Compute relative autarky prices, dened as PvaA. 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). 1'. Given your trade outcome in part 'e', draw each country's consumption point on your CPF om part 'd', and draw both a trade and autarky community indifference curve

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