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(a) In the lecture, Krugman refers to the Ricardian and Heckscher-Ohlin models as con- ventional or classical trade theory. What is the similar-similar problem posed

(a) In the lecture, Krugman refers to the Ricardian and Heckscher-Ohlin models as "con- ventional" or "classical" trade theory. What is the "similar-similar problem" posed by conventional trade theory? (b) Why Krugman defines comparative advantage as "the idea that countries trade to take advantage of their differences"? Elaborate this definition in light of both the Ricardian and the Heckscher-Ohlin models. (c) Based on conventional trade theory, what were the fears associated to the the creation of the European Common Market? (d) Why Krugman says that the world is "becoming more classical

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