Problem
Gains from Trade: Canada and Brazil have the same resources. Canada can use all the resources to produce either 9 lumbers or 3 aluminums. Brazil can use all the resources to produce either 3 lumbers or 2 aluminums.
(a). Determine the absolute advantage for each country. Explain.
(b). Determine the specialization pattern between the two countries. Explain.
(c). Use the consumption possibilities curves to show the gains from trade. Use two diagrams (one for each country) to assist your analysis. Make sure the exchange ratio is reasonable
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.