In the Ricardian model, if a country's trade is restricted, this will cause all except which?
A) limited specialization and the division of labor
B) reduced volume of trade and reduced gains from trade
C) nations to produce inside their production possibilities curves
D) a country to produce some of the product of its comparative disadvantage
E) raised costs as more diverse product is produced internally

Question

Quizplus · Accepted Answer

In the Ricardian model, trade restrictions do not cause nations to produce inside their production possibilities curves; they still produce on the curve but with less efficiency.

In the Ricardian Model, If a Country's Trade Is Restricted