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For questions 13 and 14, use the following scenario: Assume that the comparative-cost ratios of two products pasta and tomatoesare as follows in the nations
For questions 13 and 14, use the following scenario:
Assume that the comparative-cost ratios of two products pasta and tomatoesare as follows in the nations of Sauceland and Tortella:
- Sauceland: 1 box pasta 3 cans tomatoes
- Tortella: 1 box pasta 6 cans tomatoes
1. In what product should each nationspecialize?
2.Would the following terms of trade be acceptable to both nations? Explain your responses.
- 1 box pasta 2 cans tomatoes?
- 1 box pasta 4 cans tomatoes?
- 1 box pasta 7 cans tomatoes?
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