Given that two nations have equal resources and both nations agree to specialize in the production of a product
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Given that two nations have equal resources and both nations agree to specialize in the production of a product
that is most efficient, determine:
- Specialization between the two nations (which nation specializes in which product?)
- The range of terms of trade (trade negotiation terms)
- The best of terms of trade (democratic distribution of trade benefit)
- The net benefit for each country (after specialization)
- Discuss the limitations of production and export based on such assumption in the current global economy
Use the following data to answer the above questions.
Before specialization
10
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