Assume Canada and the United States each produce only two products available for export: cars and...

 

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Assume Canada and the United States each produce only two products available for export: cars and oranges. Canada can produce a maximum of 100 000 tonnes of oranges or a maximum of 200 000 cars. USA can produce a maximum of 200 000 tonnes of oranges or a maximum of 500 000 cars Should the countries specialize and trade? Explain mathematically. Assume Canada and the United States each produce only two products available for export: cars and oranges. Canada can produce a maximum of 100 000 tonnes of oranges or a maximum of 200 000 cars. USA can produce a maximum of 200 000 tonnes of oranges or a maximum of 500 000 cars Should the countries specialize and trade? Explain mathematically.

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Lets calculate the opportunity costs for each country Opportunity cost of producing oranges in Canad... View the full answer