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Location 1

The Ricardo-Viner or “Sector-Specific Factors”model assumes that both commodities require

a sector specific input (e.g. land for corn and machines for umbrellas) as well as a mobile

factor. In contrast, the Ricardo model assumesthat there is a single factor of production, which

is mobile across sectors.

Comparative statics

Equilibrium in the basic model

The basic building block in this model is the optimality condition that the value of the marginal

product of labor (the mobile factor) is equal to the wage, i.e. the price of labor.

The Ricardo Viner Model

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