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Romania joined the European Union (EU) in the early 2000s and began to face intense import competition from other EU members, such as Italy. Suppose
Romania joined the European Union (EU) in the early 2000s and began to face intense import competition from other EU members, such as Italy. Suppose you have the following data on labor productivity for paper and corn production in Romania and Italy. Assume that paper and corn production are measured in constant dollars reflecting the value of the products. Use the Ricardian model to analyze possible effects on each country's paper and corn industries when answering the questions that follow. Country Sales per Employee Paper Corn (Dollars per year) (Dollars per year) Romania 41,000 20,500 Italy 82,000 32,800
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