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.

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Definitions:

Flexible Position

A negotiator's ability to adjust their demands or stance based on the discussion's progress and the other party's needs.

Advantages

Positive or favorable factors or conditions that contribute to reaching a goal or achieving a desirable outcome.

Extreme Opening Offer

An initial negotiation position that is highly ambitious or far from what is ultimately desired, used as a strategy to shift the bargaining range.

Commitment

The state or quality of being dedicated to a cause, activity, or goal, often demonstrated through persistence and effort.