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The following tables describe the hypothetical PPC (product possibility curves) for Canada and North Korea for Fish and Lumber (both in millions of tonnes). Before

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The following tables describe the hypothetical PPC (product possibility curves) for Canada and North Korea for Fish and Lumber (both in millions of tonnes). Before trade Canada produce at point D and North Korea at point B. Canada A B Fish 0 A 16 20 Lumber 100 80 60 40 20 North Korea A B D E Fish O 10 20 30 40 50 Lumber 15 12 19 16 3 In Canada the opportunity cost of 1 unit of Fish is of * * Lumber. In North Korea the opportunity cost of 1 unit of Lumber is|8 38 : > Fish, Canada has a comparative advantage in Fish # x and therefore should import Lumber Assume each country specializes in their area of comparative advantage. For trade to occur, the limits of the terms of trade for 1 uint of Lumber will be 0.2 to 3.33 # Fish.The countries decide to trade 20 units of Fish for 50 units of Lumber. Fill in the following table: Country/|Before Trade Product Trade Specialization After Trade (Import/Export) Gains in Trade Canada Fish 12 V 20 * v 20 # v 8 V Lumber 40 100 # v 50 # v 50 # V 10 # v North Korea Fish 10 50 # V -20 # v 30 # V 20 # v Lumber 12 V 50 # v 50 * V 38 # v After trade, producers * * will be happy in the Canadian Fish market. After trade, in the Canadian Fish market consumers will consume more *

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