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Given the following Ricardo-type table showing the amount of labor input needed to produce one unit of output of the two goods in the two

Given the following Ricardo-type table showing the amount of labor input needed to produce one unit of output of the two goods in the two countries:


Steel Cloth


United Kingdom 4 days 8 days


Germany 6 days 9 days


a. The United Kingdom has an absolute advantage in both goods and a comparative advantage in cloth.


b. The pre-trade price ratio in the United Kingdom is 1 steel : 2 cloth.


c. The United Kingdom has an absolute advantage in neither good but a comparative advantage in steel.


d. The pre-trade price ratio in Germany is 1 cloth : 1.5 steel.

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