In your answer to this question, use the numerical example from the section on Ricardo’s theory of comparative advantage.

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QUESTION:

In your answer to this question, use the numerical example from the section on Ricardo’s theory of comparative advantage. What is the effect on the pattern of trade predicted by the Ricardian analysis if the number of labor hours required to make a unit of wheat in the United States is reduced by half (that is, if its productivity doubles)? Now return to the initial numbers. What is the effect on the pattern of trade if instead the number of hours required to make a unit of cloth in the United States is reduced by half (productivity doubles)?


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