1. In answering the following questions, all the assumptions of the Ricardian trade model apply. Prior to trade, each NORTH worker can produce 2 yards of cloth per day (= UNIT OF LABOUR PER UNIT OF CLOTH) or produce 3 bushels of wheat per day (= 1/3 UNIT OF LABOUR PER UNIT OF WHEAT). SOUTH workers can produce 4 yards of cloth per day (1/4 UNIT OF LABOUR PER UNIT OF CLOTH) or 5 bushels of wheat per day (1/5 UNIT OF LABOUR PER UNIT OF WHEAT

Product ratio = 3/2 = price cloth / price wheat

1. At this product price ratio, what is the relative wage in the two countries?