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# Exam 1 - IMPORTANT Place your NAME FORM NUMBER and ID...

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Multiple Choice (57 Points) 1) Suppose that consumers in each country possess the utility function U = D W 1/ 7 D C 6/ 7 where D W is consumption of wine and D C is consumption of clothing. The equation for the relative demand curve will be a. p c p w = 6 D W D C æ è ç ö ø ÷ b. p w p c = 6 D W D C æ è ç ö ø ÷ c. p c p w = 1 6 D W D C d. p w p c = 1 6 D W D C e. p w p c = D W D C 2) The article “Ricardo’s Difficult Idea” is written by: a. Paul Krugman b. Paul Krugman and Maurice Obstfeld c. Lawrence Summers d. Martin Wolff. e. Dani Rodrik 3) Suppose that there are two countries (A&B) and two industries. Output per worker is 22.5 in a given industry for two countries. Under the Ricardian model, this implies that 4) The Ricardian model differs from the Heckscher-Ohlin model in that it

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