If in a standard trade model equilibrium a country exports 40 units of food and imports \underline{\qquad} units of clothing, then with the price of food equal to $12, the price of clothing is equal to $15.
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In a standard trade model, countries specialize in producing and exporting goods in which they have a comparative advantage. This means that they produce and export goods that they can produce at a lower opportunity cost compared to other countries. Show more…
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