(Solved): This exercise applies the basic Ricardian model of one factor (labor) and two goods to the national ...

This exercise applies the basic Ricardian model of one factor (labor) and two goods to the national economy of Home. Assume the following: PLS - number of labor hours needed to produce a unit of sugar in Home: BLC = number of labor hours needed to produce a unit of canvas in Home: Ps = the price per ton of sugar, Pc the price per bolt of canvas. Which of the following represents the opportunity cost of sugar? OA Ps B. aLs/LC OC. PLCLS In the absence of international trade, Home will have to produce both sugar and canvas for itself. However, it will do so only if OA. PS/PC asfalc OB. Ps/as Pc/LC ?C. Workers are indifferent as to where (Sugar or Canvas) they work. OD. A and B are correct. OE. All of the above are correct. OD. Ps/Pc