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Suppose that Indonesia suggests that Australia sells iron to Indonesia for 2.0 tonnes of petrol for every tonne of iron, and equivalently it will sell
Suppose that Indonesia suggests that Australia sells iron to Indonesia for 2.0 tonnes of petrol for every tonne of iron, and equivalently it will sell tonnes of its petrol to Australia for 0.5 tonnes of iron for every tonne of petrol. d. Will Australia accept this offer? Explain why or why not? (4 marks) e. Suppose Australia wants 30 tonnes of petrol and Indonesia wants 20 tonnes of petrol and as much iron as they can get. Show that Indonesia and Australia can have more iron while still meeting their petrol requirements when they specialise and trade than when they do not
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