The Ricardian model focuses on how differences in _________ influence international trade patterns.
A) demand
B) comparative costs
C) absolute costs
D) transportation costs

Question

Quizplus · Accepted Answer

The Ricardian model is based on the principle of comparative advantage, which states that countries should specialize in producing the goods and services in which they have a comparative cost advantage. Therefore, the model focuses on how differences in comparative costs (i.e., the opportunity cost of producing one good in terms of the production of another good) influence international trade patterns.

The Ricardian Model Focuses on How Differences in _________ Influence