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Determine the terms of trade between the two countries

Assignment Help Macroeconomics
Reference no: EM132471753

Mexico PPC

Product A B C D E

Avocados 0 20 24 40 60

Soybeans 15 10 9 5 0

U.S. PPC

Product A B C D E

Avocados 0 30 33 60 90

Soybeans 30 20 19 10 0

1. Determine which product each country has a Comparative Advantage in.

2. Determine the Terms of Trade between the two countries.

3. Calculate the total output after trade for both countries.

4. Determine the Gains from Trade for both goods- Starting at Pt. C for Mexico and Pt. T for the U.S.

Reference no: EM132471753

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