In the Ricardian model of trade, which of the following statements is false? A. The consumption possibilities frontier is the same as the production possibilities frontier in autarky B. Two countries will trade so long as they each have comparative advantage C. The introduction of trade leaves the production possibilities frontier unchanged D. Trade may not lead to complete specialization
In the Ricardian model of trade, which of the following statements is false? A. The consumption possibilities frontier is the same as the production possibilities frontier in autarky B. Two countries will trade so long as they each have comparative advantage C. The introduction of trade leaves the production possibilities frontier unchanged D. Trade may not lead to complete specialization
Chapter17: International Trade
Section: Chapter Questions
Problem 1.3P
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3. In the Ricardian model of trade, which of the following statements is false?
A. The consumption possibilities frontier is the same as the production possibilities frontier
in autarky
B. Two countries will trade so long as they each have comparative advantage
C. The introduction of trade leaves the production possibilities frontier unchanged
D. Trade may not lead to complete specialization
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