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Use the following information from the table provided below to answer the questions below:
Italy Taiwan
Soft drink cans produced per hour 2 16
Snowboards produced per hour 4 8
a) Compute the range of the international relative price of soft drink cans at which the two countries would trade.
b) Suppose that discovery of a new method of production (technological progress) in Italy doubles the marginal product of labor in snowboards. Would the two countries Italy and Taiwan continue to trade? Provide a brief explanation.
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