Good / Country : A B S: 8 6 T: 12 3 1. In autarky (no trade), What are the relative prices of the goods in each country?

Good / Country:   A           B

S:           8            6

T:          12            3

1.      In autarky (no trade), What are the relative prices of the goods in each country?

2.      (i) Which country has the comparative advantage in the production of T?

         (ii) Which country has the comparative advantage in the production of T?

3.      What are the limits to the world terms of trade?

4.      What are the limits to the relative wages, Wᴀ/ E*Wʙ in the two countries?

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