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Australia and Italy have 140 and 150 total resources, respectively. Each country produces only two goods, toilet paper and hand sanitizer. Australia can produce each
Australia and Italy have 140 and 150 total resources, respectively. Each country produces only two goods, toilet paper and hand sanitizer. Australia can produce each roll of toilet paper for 14 resources and each bottle of hand sanitizer for 19 resources. Italy can produce each roll of toilet paper for 6 resources and each bottle of hand sanitizer for 38 resources. Assume each country would prefer to consume more toilet paper and hand sanitizer than it currently can in an autarky. Also assume that each country can produce fractional units of each good. Between which range of prices of hand sanitizer (in terms of rolls of toilet paper) will there be gains from trade? Select one: a. Between 1.36 and 6.33 b. Between 0.16 and 0.74 C. Between 0.43 and 2.00 d. Between 0.50 and 2.33 e. Between 0.93 and 1.07
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