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3. Assume that the two countries specialize as you suggested in Question 2 and that India exports 30% of its production to Germany using India's

3. Assume that the two countries specialize as you suggested in Question 2 and that India exports 30% of its production to Germany using India's domestic price as the trade price between the two countries. a) What would be the respective consumption of tea and beer in the two countries?

b) Who benefits the most out of this trade arrangement and why?

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