Problem
1. In the light of the Ricardian model, how might you evaluate the claim by developing countries that they are at a disadvantage in trade with powerful industrialized countries?
2. Suppose that Portugal requires 4 days of labor to produce 1 unit of wine and 6 days of labor to produce 1 unit of clothing, while England requires 8 days of labor to produce 1 unit of wine and 12 days of labor to produce 1 unit of clothing. Which country has absolute advantages and why? What is the situation with respect to comparative advantages?