Maldonia has a comparative advantage in the production of while Lamponia has a comparative advantage in the . Suppose that Maldonia and Lamponia specialize in the production of the goods in which each has a potatoes production of tea comparative advantage. After specialization, the two countries can produce a total of 24 million pounds of potatoes and 12 millioi pounds of tea. Suppose that Maldonia and Lamponia agree to trade. Each country focuses its resources on producing only the good in which it has a comparative advantage. The countries decide to exchange 8 million pounds of potatoes for 8 million pounds of tea. This ratio of goods is known as the price of trade between Maldonia and Lamponia.
Maldonia has a comparative advantage in the production of while Lamponia has a comparative advantage in the . Suppose that Maldonia and Lamponia specialize in the production of the goods in which each has a potatoes production of tea comparative advantage. After specialization, the two countries can produce a total of 24 million pounds of potatoes and 12 millioi pounds of tea. Suppose that Maldonia and Lamponia agree to trade. Each country focuses its resources on producing only the good in which it has a comparative advantage. The countries decide to exchange 8 million pounds of potatoes for 8 million pounds of tea. This ratio of goods is known as the price of trade between Maldonia and Lamponia.
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Transcribed Image Text:Maldonia has a comparative advantage in the production of
while Lamponia has a comparative advantage in the
. Suppose that Maldonia and Lamponia specialize in the production of the goods in which each has a
potatoes
production of
tea
comparative advantage. After specialization, the two countries can produce a total of
24 million pounds of potatoes and
12 millioi pounds of
tea.
Suppose that Maldonia and Lamponia agree to trade. Each country focuses its resources on producing only the good in which it has a comparative
advantage. The countries decide to exchange 8 million pounds of potatoes for 8 million pounds of tea. This ratio of goods is known as the price of
trade between Maldonia and Lamponia.
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