Suppose that Freedonia and Lamponia agree to trade. Each country focuses its resources on producing only the good in which it has a comparative
advantage. The countries decide to exchange 2 million pounds of potatoes for 2 million pounds of tea. This ratio of goods is known as the price of
trade between Freedonia and Lamponia.
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Suppose that Freedonia and Lamponia agree to trade. Each country focuses its resources on producing...
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