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Specialization in trade- based on Ricardo’s Theory: Given that two nations have equal resources and has agreed to specialize in the production of a product that is most efficient, determine: Which

Specialization in trade- based on Ricardo’s Theory:

Given that two nations have equal resources and has agreed to specialize in the production of a product that is most efficient, determine:

  1. Which country specializes in the production of auto product and which one in plane product?
  2. The range of terms of trade (the range of trade negotiation term)
  3. The best of terms of trade (democratic distribution of trade benefit)
  4. The net benefit for each country (after specialization)
  5. 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

Products/Country

Japan

US

Auto

20

10

Plane

10

10

Apr 08 2021 View more View Less

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