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please do part b Two countries, Blue Violet and Orange Rose, produce only two goods per day: tea pots and coffee pots with existing resources
please do part b
Two countries, Blue Violet and Orange Rose, produce only two goods per day: tea pots and coffee pots with existing resources and technology. Using the table below, answer the following prompts: Blue Violet (BV) Orange Rose (OR) Tea Pots (T) Coffee Pots (C) Tea Pots (T) Coffee Pots (C) 0 120 A 0 56 B 10 60 B 14 28 20 0 28 0 A (a) What is the marginal opportunity cost of one tea pot in each country? (b) ) Which country - Blue Violet or Orange Rose - has comparative advantage in tea pots (T)? Why would these countries specialize and trade according to their comparative advantage? (c) What are the gains from trade for the two countries when before trade Blue Violet and Orange Rose each produced and consumed at point B on their respective PPFs and after trade Blue Violet and Orange Rose each specialize in their comparative advantage. Solve for the gains in total tea pots (T) and/or total coffee pots (C) in the after-trade market relative to before trade. BI V S T E 35 X Insert FormulaStep by Step Solution
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