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Assume that transportation costs are especially high for Widgets in the two-country, two-product Ric

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Assume that transportation costs are especially high for Widgets in the two-country, two-product Ric

Assume that transportation costs are especially high for Widgets in the two-country, two-product Ricardian model, and Country A enjoys a comparative advantage in Widgets, then
A) country B may end up exporting Widgets.
B) Trade may be impossible between the two countries.
C) country A may switch to having a comparative advantage in the other good.
D) country B must also enjoy a comparative advantage in Widgets.
E) country A will still export Widgets.

Textbook

International Economics: Theory and Policy

Edition: 10^th

Author: Krugman

Read 109 times

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machukian

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Chako Author

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8 years ago

Correct!

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machukian

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7 years ago

Good luck

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