Ricardian model of the international trade

Ricardian model of the international trade.

1.explain the so-called œRicardian model of the international trade, including its assumptions, and use this model to explain why and how both of the two countries considered gain from free trade between them. what determines the relative extent of these gains? 2.explain the so-called œheckscher-Ohlin(H-O) model of trade, including its assumptions, and use this model to explain : a) what determines the pattern of the trade-i.e which country exports which good?; b)how, in this model, wage and profit rates will tend to equalize;and c)what conditions could falsify either or both of these conclusions ? 3. Explain how a tariff imposed by a œsmall country on its imported good causes a loss of real income, in the sense of: a) less efficient resource allocation; and b) lower utility, or œwell-being on the part of consumers. Go on to compare this to the alternative of: 1) a quota, and 2): a subsidy 4.based on class discussions and your reading, discuss as many of the arguments against free trade as you can, and assess their œvalidity: i.e., the extent to which they make sense from national point of view

Ricardian model of the international trade

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