In the Context of the Classical (Ricardo) Model, Explain, for Each

question 2

Essay

In the context of the Classical (Ricardo) model, explain, for each of the following two statements, why the statement is either TRUE or FALSE.
(a) "If country A can produce all goods with less labor time per unit of
output than can country B, then there can be no reason for country A
to trade with country B - country A would always maximize its own
welfare by satisfying its consumption desires for all goods from its
own production."
(b) "If country I's workers have greater productivity in all industries
than country II's workers, then workers in country I will be paid a
higher wage rate than workers in country II."

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Definitions:

Wages, Rent, And Profit

These are components of income distribution in economics, with wages paid to labor, rent earned from land, and profit derived from capital investment.

Scientific Thinking

A method of inquiry that involves observing phenomena, asking questions, forming hypotheses, conducting experiments, and drawing conclusions based on evidence.

Assumptions

Conditions or principles that are taken as true or as certain to happen, without proof, for the purpose of argument or investigation.

Factor Of Production

A resource used in the production process to generate goods and services, such as labor, land, and capital.