If a very small country trades with a very large country ...

[cmoore54]

If a very small country trades with a very large country according to the Ricardian model, then
 
  A) the small country will suffer a decrease in economic welfare.
  B) the large country will suffer a decrease in economic welfare.
  C) the small country only will enjoy gains from trade.
  D) the large country will enjoy gains from trade.
  E) both countries will enjoy equal gains from trade.

Question 2

Spencer and Brander's model highlights the existence of
 
  A) aircraft industries.
  B) excess returns present in highly competitive markets.
  C) excess returns, or rents, available in non-competitive markets.
  D) the futility of government bureaucrats' attempts to build an airplane.
  E) natural advantages in foreign technology firms.

[pikon]

Answer to Question 1

C

Answer to Question 2

C

[cmoore54]

Excellent

[shailee]

Thanks for the timely response, appreciate it