Xiamen University

WISE-SOE.

Name: Noah Issa Philip Benjamin ID: 15220171155809

Course international Trade. Assignment 1

Problem 1: Ricardian Model

What determines the pattern of international trade between two countries in the
Ricardian Model?

Problem 2: Ricardian Model

1. United States has an absolute advantage in producing wheat because it has

ability and efficiency in wheat production then china. USA can produce 105
bushels of wheat per hour while China can only produce 51 bushel of wheat
per hour.

2. Based on the David Ricardo model two countries can only go for trade only if
they have differences in the opportunity cost. For this case the opportunity
cost of producing wheat over beef is 51 = 3 for china and US is 105 35 = 3.
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The same for the beef production, which is equal for the both countries. Which
is 1/3, therefore China and US can not go for trade because, countries only
go for trade when there is differences in the opportunity cost, hence these both
countries won’t trade.

3.

Q3.