In a Two Country and Two Product Ricardian Model,a Small

question 67

Multiple Choice

In a two country and two product Ricardian model,a small country is likely to benefit more than the large country because

• A) the large country will wield greater political power, and hence will not yield to market signals.
• B) the small country is less likely to trade at price equal or close to its autarkic (domestic) relative prices.
• C) the small country is more likely to fully specialize.
• D) the small country is less likely to fully specialize.
• E) the small country can raise wages.