***************

Answer only if you are sure about the correct answer:

***************

Bulgaria recently joined the European Union (EU) and faces intense import competition from other EU members, such as Greece. Suppose you have the following data on labor productivity for footwear and beef production in Bulgaria and Greece. Assume that footwear and beef production are measured in constant dollars reflecting the value of the products. Use the Ricardian model to analyze possible effects on each country's footwear and beef industries when answering the questions that follow. Sales per Employee Footwear Beef Country (Dollars per year) (Dollars per year) Bulgaria 52,000 26,000 neither product Greece 78,000 31,200 both products footwear beef neither product The table suggests that Greece has an absolute advantage over Bulgaria in and a comparative advantage in both products the same as the footwear industry lower than footwear The table suggests that wages in Greece are in Bulgaria. both industries higher than beef the beef industry As a result of Bulgaria's joining the EU, employment in Bulgaria is likely to fall in neither industry True or False: The degree of openness of the Bulgarian economy will have a negative impact on the level of employment. O True O False