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Economics Mexico (MK) and Costa Rica (CR) produce two goods, avocados (A) and guavas (G), using a single factor of production but with different technologies.
Economics Mexico (MK) and Costa Rica (CR) produce two goods, avocados (A) and guavas (G), using a single factor of production but with different technologies. Suppose that the unit labor requirement in both countries for each good are as the following: MX: .23\" = :1,an = 2 CR: GER =1,agR =1 The number of workers in country is 120. a. Which country has an absolute advantage in the production of avocados? Guavas? b. What is the autarky relative price of avocados in each country? c. Which country has a comparative advantage in the production of avocados? Guavas? d. When countries are perfectly specialized, what are the quantities that each country will produce? What is the world's relative supply of avocados to guavas with perfect specialization
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