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Consider the model of Ricardo in a setting of 6 goods and two countries. a) Draw how the World Relative demand.(Hint: Y-axis has relative wagesX-axis
Consider the model of Ricardo in a setting of 6 goods and two countries.
a) Draw how the World Relative demand.(Hint: Y-axis has relative wagesX-axis has the relative Labor demand). Explain what every single axis means and the marks or values you add to each axis.
b) Where in the relative demand curve a small change in wages can affect the specialization patterns (highlight clearly those parts)?
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