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The Ricardian model and trade

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In our treatment of the Ricardian model We have focused on the case of trade involving only two countries. Suppose that there are many countries capable of producing two goods, and that each country has only one factor of production, labor. What could we say about the pattern of production and trade in this case? (Hint: Try constructing the world relative supply curve.

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Solution Summary

The solution discusses the pattern of production and trade in regards to the Ricardian model.

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The world relative supply curve consists of a step function, including as many horizontal portions, equal to the number of countries, and ...

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