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Model of International Trade

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Written by:

Kathy G


Date added:

February 1, 2017








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11 / 3023


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It was because Ricardo thinks that these other production aspects, such as land and capital, either were no significance or were so evenly distributed overall that they always operated in a fixed proportion, except for labor costs. ? The theory states that a country should concentrate efforts on producing goods that have comparative advantage over other country, rather than absolute advantage, and then export those goods in exchange for goods that command advantage in their native countries...
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seems to have lower production costs in both hand calculator and wine than Italy. ? But if according to the comparative advantage, U.S. is more specialize in hand calculator while Italy is more specialize in wine. ? Hence, under this theory, if both the countries go free trade, than U.S. should focus on the production of hand calculator and exchange it with wine from Italy...
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