In the Ricardian model, comparative advantage is likely to be due to
A) scale economies.
B) home product taste bias.
C) greater capital availability per worker.
D) labor productivity differences.
E) political pressure.
Question 2
Two countries engaged in trade in products with no scale economies, produced under conditions of perfect competition, are likely to be engaged in
A) inter-industry trade.
B) monopolistic competition.
C) intra-industry trade.
D) Heckscher-Ohlin trade.
E) oligopolistic competition
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