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Some parts of the graph are done for you. Starting from the unit-value isoquants shown below and using the factor endowments at point E ,
Some parts of the graph are done for you. Starting from the unit-value isoquants shown below and using the factor endowments at point E, carefully construct the rest of the pieces of the Lerner diagram for this economy. Suppose that this country spends half of its income on Cloth, C, and a half on Food, F. What does it export and what does it import?
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