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BI. (14 marks} Consider Rome and Syracuse in a Ricardian world {includes all the assumptions of the Ricardian model). Each country produces two goods, Wheat
BI. (14 marks} Consider Rome and Syracuse in a Ricardian world {includes all the assumptions of the Ricardian model). Each country produces two goods, Wheat [W] and Glass (G). The labour hours required to produce one unit of each good in each country is: a. {2 marks) What is the opportunity cost of wheat in each countty? h. {2 marks] In which good does Rome have comparative advantage? Explain. c. {4 marks] Suppose Syracuse has 1,2001ahor hours available, and Home has 2,000 labor hours available. Draw the graph of the production possibility frontier {PPF} for each country, with the wheat production on the horizontal axis. d. {2 marks] If Syracuse and Rome trade, what would he the total world production of glass and wheat'EI e. {4 marks) Draw the world relative supply curve for wheat in this model. Label your graphs
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