Question: Consider the Ricardian framework with two countries, A and B, and two products, G1 and G2. The autarky relative prices of G1 are 2 and
Consider the Ricardian framework with two countries, A and B, and two products, G1 and G2. The autarky relative prices of G1 are 2 and 4 for countries A and B respectively. Suppose the trade equilibrium relative price of G1 is 4. Which one of the following independent scenarios is most likely to be true? Group of answer choices Country B is much larger than country A. Country A is much larger than country B. Consumers in country A dislike G1. Country B has a comparative advantage in producing G1
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