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1. The following graphs depict the markets for coffee and tea in Brazil and China. For this question, I am assuming these industries use only

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1. The following graphs depict the markets for coffee and tea in Brazil and China. For this question, I am assuming these industries use only labor, not capital, and have constant MPLs. I have used a thick line to indicate the PPF in each country, and thin lines to indicate possible relative prices under trade. Use these graphs to answer the following questions. China 24- 18 22 30 36 Qc Brazil 121415 36 (a) Assume China has 4 workers and Brazil has 3. Fill out the fol- lowing chart: China Brazil Wagec = 12 |Waget = Wages = Waget = 12 MPLe = MPL = MPL* = MPL = Pc = PL = P* = P* = (b) What is the relative price of coffee under autarky in China, " ? What is the relative price of coffee under autarky in Brazil, Which country has a comparative advantage in coffee? (c) When trade opens, what will be the world relative price of coffee, (P ) ? How much of each good will each country export? Do both countries gain from trade?(d) Suppose the graph for Brazil actually looks like this: 12 1618 1.36 :2; Under this scenario, what is g) :2 How much of each good will each country export? Do bot countries gain from trade

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