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Author Question: Explain carefully why the assumption of identical technology worldwide eliminates the classical ... (Read 50 times)

sam.t96

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on: Jun 30, 2018
Explain carefully why the assumption of identical technology worldwide eliminates the classical basis for international trade.
 
  What will be an ideal response?

Question 2

Which four nations account for most of the population and economic activity in Latin America?
 
  What will be an ideal response?


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joechoochoy

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Reply #1 on: Jun 30, 2018
Answer to Question 1

In the classical model, differences in technology between the two countries lead to differences in autarky prices. If one were to replace that assumption with the HO assumption of identical technologies, the autarky prices would be identical, and there would be no reason for trade to begin between the two countries.

Answer to Question 2

Brazil; Mexico; Colombia; Argentina


sam.t96

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Reply 2 on: Jun 30, 2018
Great answer, keep it coming :)

31809pancho

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Reply 3 on: Yesterday
Excellent

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