The Two-Country, Multi-Product Model Differs from the Two-Country, Two-Product Model

question 44

Multiple Choice

The two-country, multi-product model differs from the two-country, two-product model in that, in the former

• A) the relative wage ratio will determine the pattern of trade ( which good is exported by which country).
• B) which country will export which product is determined entirely by labor productivity data.
• C) full specialization is likely to hold in equilibrium.
• D) none of the goods are potentially nontraded.
• E) domestic relative prices are not relevant.

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