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Output per unit of labor Mexico Nicaragua Coffee 10 8 Wheat 20 8 Which country has absolute advantage in the production of coffee/wheat? Which country

Output per unit of labor

Mexico Nicaragua

Coffee 10 8

Wheat 20 8

Which country has absolute advantage in the production of coffee/wheat?

Which country has comparative advantage in the production of coffee/wheat?

Describe the terms of trade

Gains from trade

What might cause the terms of trade for Mexico to improve?

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