Peru can produce 16 units of corn or 8 units of wheat with a unit of resource.

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Peru can produce 16 units of corn or 8 units of wheat with a unit of resource. Mexico can produce 12 units of corn or 4 units of wheat.

a. Which country has the absolute advantage in producing each good?

b. What is the relative price of wheat in each country? Of corn?

c. If these are the only countries in the world, which should produce wheat? Corn?

d. In what range will the terms of trade for wheat fall?

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Economics Barrons Business Review Series

ISBN: 9781438008776

6th Edition

Authors: Walter J. Wessels

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Question Posted: Feb 18, 2024 04:01 AM

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Peru can produce 16 units of corn or 8 units of wheat with a unit of resource.

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Economics Barrons Business Review Series

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