An immigration wave increases the labor supply in the home country, likely impacting comparative advantage and relative wages. The increase in supply could alter the opportunity costs associated with producing goods, potentially shifting comparative advantage if the additional labor affects labor efficiency or adaptability. Consequently, the relative wages between home and foreign countries (w/w*) can change due to a potential shift in the supply side impacting labor demand, causing the home economy's absolute wages to adjust as labor becomes more abundant, affecting specialization and trade patterns .

Relative wage ratios between countries in a Ricardian model setting reflect labor productivity differences because wages are determined by average productivity levels in each country's industries. If one country has higher productivity in producing a particular good, it can pay higher wages in that industry since unit labor costs are lower. Therefore, the relative wage ratio adjusts to reflect these productivity variations. For instance, if country A has a productivity advantage over B in all sectors, its wage levels will typically be higher as reflected in a higher wA/wB ratio, indicating that labor in country A can produce more output per labor unit compared to country B .

A significant change in world market price ratios, such as a drop from PF/PC = 2/3 to 1/4 due to a third country's market entry, can drastically shift production patterns. Countries will react by re-evaluating their opportunity costs and adjusting their production to align with the new market prices. Country A and B may shift resource allocation towards the good with relatively increased profitability. Consequently, relative wages (wA/wB) will adjust as labor markets respond to these shifts in demand driven by new price realities, influencing both absolute and relative wage levels as specialization strategies change .

Changes in a country's productivity impact global supply by altering its production capacity and specialization patterns. If productivity in one good increases, the country may specialize more in its production, raising the global supply of that good. This can shift the global supply curve outward for that good. Concurrently, changes in prices due to altered supply affect global demand dynamics, potentially increasing demand for the less produced good due to relative scarcity. Therefore, global market equilibria for both prices and quantities adjust, reflecting these supply and demand shifts, altering trade volumes and price levels worldwide .

In the Ricardian model, changes in productivity affect the labor required for producing each good. If a country's productivity improves for a good, reducing labor per unit, this can enhance its comparative advantage as the opportunity cost of producing this good decreases. This would also affect wage structures as relative wages (wA/wB) might have to adjust to maintain equilibrium in the face of shifting production capabilities. Initially, country B's increased productivity in clothing cuts its labor unit cost from 3 to 1, altering the comparative advantage and potentially raising relative wages if demand and pricing mechanisms adjust accordingly .

A new entrant, particularly one with a large output capacity, can alter global supply, affecting trade patterns among existing countries. Autarky prices adjust as this entrant impacts global price ratios with increased production volume, changing the relative scarcities and economic logic of specialization. Established countries might shift from previous trading partners or switch their specialization strategies to adapt to new price points. For instance, if a new country massively produces agricultural goods, global prices for food could decrease, prompting established economies to re-evaluate their comparative advantages and alter their autarky equilibriums and trade relationships accordingly .

A country might choose not to produce any of one good if it has a distinct comparative advantage in producing another good, or if world market prices incentivize specializing completely in one good. This is depicted graphically on a PPF by having a production point on one axis, showing that all resources are devoted to one good. For instance, if international prices favor clothing strongly due to a global shortage, a country could focus entirely on clothing production, using the PPF to illustrate full specialization, aligning its production choice with the axis devoted to clothing .

Absolute advantage is determined by which country can produce a good using fewer labor units. Comparative advantage is determined by comparing opportunity costs of producing goods in each country. In the given model, for the home country, it takes 4 units of labor to produce clothing and 2 units for food, while the foreign country requires 5 and 3 units, respectively. The home country has an absolute advantage in both goods since it uses fewer labor units for each. Comparative advantage is found by comparing opportunity costs, with the home country having a lower opportunity cost for food and hence a comparative advantage in it, while the foreign country has a comparative advantage in clothing due to a lower relative opportunity cost .

When two countries open up to trade, the relative prices for goods will typically equilibrate between the countries' autarky prices. This is because each country will specialize in producing the good for which it has a comparative advantage, leading to increased total world production and trade of goods within a range where the domestic opportunity cost of manufacturing a good in one country is less than or equal to another country’s buying cost. In the given example, if the home country has a comparative advantage in food, trade will adjust relative prices to reflect food prices being lower in the home country compared to clothing, affecting consumption and production patterns accordingly .

A production possibility frontier (PPF) diagram illustrates the maximum output possibilities for two goods given fixed resources in a country. Under autarky, the PPF shows the trade-offs between producing these goods. It displays how much of one good must be reduced to increase production of the other, given the country's technological limits and labor availability. For example, by drawing clothing on the X-axis and food on the Y-axis, a country can decide its optimal production mix depending on consumer preferences, illustrated by an indifference curve, intersecting the PPF to show optimal production/consumption under autarky conditions .