Brazil and Russia have 500 and 600 pharmaceutical labours, respectively. Each country produces only two goods,...

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Brazil and Russia have 500 and 600 pharmaceutical labours, respectively. Each country produces only two goods, vaccines and N95 masks. Brazil needs 185 labours to produce 100 vaccines and 39 to produce 100 N95 masks. Russia needs 155 labours to produce 100 vaccines and 49 labours to produce 100 N95 masks. Assume each country would prefer to consume more vaccines and N95 masks than it currently can in an autarky. Also assume that each country can produce fractional units of each good. Between which range of prices of vaccines (in terms of N95 masks) will there be gains from trade? Which country has comparative advantage in producing vaccines? Brazil and Russia have 500 and 600 pharmaceutical labours, respectively. Each country produces only two goods, vaccines and N95 masks. Brazil needs 185 labours to produce 100 vaccines and 39 to produce 100 N95 masks. Russia needs 155 labours to produce 100 vaccines and 49 labours to produce 100 N95 masks. Assume each country would prefer to consume more vaccines and N95 masks than it currently can in an autarky. Also assume that each country can produce fractional units of each good. Between which range of prices of vaccines (in terms of N95 masks) will there be gains from trade? Which country has comparative advantage in producing vaccines?

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Lets first calculate the opportunity cost of producing vaccines and N95 masks in each country Opport... View the full answer