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Answer it correctly please. Explain well. Ty-ped answer only. I ll rate. 5. The price of trade Suppose that Slovenia and Wales both produce sunflowers
Answer it correctly please. Explain well. Ty-ped answer only. I ll rate.
5. The price of trade Suppose that Slovenia and Wales both produce sunflowers and wheat. Slovenia's opportunity cost of producing a bushel of wheat is 4 bushels of sunflowers while Wales's opportunity cost of producing a bushel of wheat is 12 bushels of sunflowers. By comparing the opportunity cost of producing wheat in the two countries, you can tell that Slovenia * has a comparative advantage in the production of wheat and Slovenia T has a comparative advantage in the production of sunflowers. Suppose that Slovenia and Wales consider trading wheat and sunflowers with each other. Slovenia can gain from specialization and trade as long as it receives more than of sunflowers for each bushel of wheat it exports to Wales. Similarly, Wales can gain from trade as long as it receives more than of wheat for each bushel of sunflowers it exports to Slovenia. Based on your answer to the last question, which of the following prices of trade (that Is, price of wheat in terms of sunflowers) would allow both Wales and Slovenia to gain from trade? Check all that apply. WI bushel of sunflowers per bushel of wheat O) 5 bushels of sunflowers per bushel of wheat 0 7 bushels of sunflowers per bushel of wheat O 16 bushels of sunflowers per bushel of wheatStep by Step Solution
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