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Consider two countries, Limgrave and Caelid, in a Ricardian setting. Suppose Limgrave has 87 workers and Caelid has 100 workers. The output that one worker
Consider two countries, Limgrave and Caelid, in a Ricardian setting. Suppose Limgrave has 87 workers and Caelid has 100 workers. The output that one worker can produce in each country in terms of each good is given in the following table: Limegrave A: 6 Limegrave B: 1 Caelid A: 2 Caelid B: 1.1 Which of the following statements is true? 1. Limgrave has a comparative advantage in A. 2. Foreign has a comparative advantage in A. 3. Limgrave has a comparative advantage in A and B. 4. Neither country has a comparative advantage in A
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