1.2.2 India and Pakistan each produce only Wheat and Rice. Domestic prices are given in the following...

Question:

1.2.2 India and Pakistan each produce only Wheat and Rice.

Domestic prices are given in the following table:

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If 1 INR = 1 PKR,

a. Which country has an absolute advantage in production of Wheat? Rice?

b. Which country has a comparative advantage in production of Wheat ? Rice?

c. If India and Pakistan were the only 2 countries in trade, what adjustments would you predict assuming exchange rates are freely determined by the laws of supply and demand?

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Principles Of Economics

ISBN: 9780802845610

12 Global Edition

Authors: Karl E. Case, Ray C. Fair, Sharon E. Oster

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Question Posted: Nov 13, 2024 02:00 AM

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1.2.2 India and Pakistan each produce only Wheat and Rice. Domestic prices are given in the following...

Question:

Product India Pakistan Wheat Rice INR 400/Kg INR 700/Kg PKR 600/Kg PKR 900/Kg

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Principles Of Economics

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