Ricardian model Opportunity costs and comparative advantage An Example Relative demand-relative supply analysis a one factor ricardian model Production possibilities Gains from trade · Wages and trade Misconceptions about comparative advantage Transportation costs and non-traded goods Empirical evidence2 Ricardian Model • Opportunity costs and comparative advantage • An Example • Relative demand-relative supply analysis • A one factor Ricardian model • Production possibilities • Gains from trade • Wages and trade • Misconceptions about comparative advantage • Transportation costs and non-traded goods • Empirical evidence