What is the minimum price

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Reference no: EM131584192

1. You just overheard your friend say the following: "Poor countries like Malawi have no absolute advantages. They have poor soil; low investments in formal education, hence low-skill workers; no capital; and no natural resources to speak of. Because they have no advantage, they cannot benefit from trade." How would you respond?

2. Consider two countries: South Korea and Taiwan. Taiwan can produce one million mobile phones per day at the cost of $10 per phone and South Korea can produce 50 million mobile phones at $5 per phone. Assume these phones are the same type quality and there is only one price. What is the minimum price at which both countries will engage in trade?

Reference no: EM131584192

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