Compute the range of the international relative price of


Use the following information from the table provided below to answer the questions below:

                                                                    Italy                Taiwan

Soft drink cans produced per hour               2                        16

Snowboards produced per hour                   4                         8

a) Compute the range of the international relative price of soft drink cans at which the two countries would trade.

b) Suppose that discovery of a new method of production (technological progress) in Italy doubles the marginal product of labor in snowboards. Would the two countries Italy and Taiwan continue to trade? Provide a brief explanation.

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Business Economics: Compute the range of the international relative price of
Reference No:- TGS01555072

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