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27. Given the following Ricardo-type table showing the labor input required per unit of put in each of the two industries in
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27. It takes 10 days of labour to produce one unit of shirt in US whereas only 6 days in France. Therefore France is efficient in producing shirts. On the other hand, it takes only 5 days of labour to produce one unit of brandy in US whereas 12 days in France. Therefore US is efficient in producing shirts.

Following are the ratios

Shirts Brandy
USA 1 0.5
France 0.5 1

France will produce shirts and trade it with US in exchange of Brandy in the ratio of 1 : 0.5

In this case, both countries will share equal gains from trade. Hence the correct option is D.

28. A country will export a product for which it has a higher comparitive advantage. If the price it is offering in the international market is lower than the other nations, its exports will flourish.  Hence the correct option is A.

29. If the country is getting good X cheaper in the international market as opposed to producing it, it will import the good and export the cheaper one.  Hence the correct option is A.

30. As we know that the classical theory states that the countries have an absolute advantage rather than comparitive. In the aboe table it is clear that England has an absolute advantage over all the goods except Good C. Therefore it will export Good A, B, D and E and import good C from Portugal. Hence the correct option is C.

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