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In the classical model. suppose the pre-trade relative price for Country Y is 1 and for Country Z is 3. If the JTOT is 1.05
In the classical model. suppose the pre-trade relative price for Country Y is 1 and for Country Z is 3. If the JTOT is 1.05 then 0 A. Country Ygains more from free trade. 0 B. Country Z gains more from free trade 0 C. Both countries gain equally. O D. Neither country gains from free trade. QUESTION 19 Suppose the autarky relative price for gem (G) in terms of honey (H) is (PS/PH) = 7 units of honey for Country A and 10 units for Country B. O A. Country A has a comparative advantage in honey and a comparative disadvantage in grapes. O B. Country B has a comparative advantage in honey and a comparative disadvantage in grapes. O C. Both countries have a comparative advantage in honey and grapes. O D. Neither country has a comparative advantage in honey. QUESTION 20 Suppose Country A's autarky (PS/PA is 4, while country B's autarky {PS/PB is 2. O A. Country A is an importing country of S. O B. Country B is an exporting country of S. O C. Country A is an exporting country of S. O D. (a) and (b). QUESTION 21 In the case of an economy with constant opportunity cost (i.e., PPF is a straight line), then 0 A. The demand or consumers determine the equilibrium relative price. 0 B. The demand or consumers determine the equilibrium combination of outputs. O C. The producers determine the equilibrium relative price. 0 D. Both (b) and (c). QUESTION 22 The Dutch disease where the booming natural resource sector gains at the expense of the declining manufacturing sector is an application of: O A. The H-O theorem 0 B. The Samuelson-Stolper theorem 0 C. Factor price equalization theorem 0 D. The Rybcnski theorem
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