Business, 26.03.2020 20:09 mrfishyyyy

The Dominican Republic and Nicaragua both produce coffee and rum. The Dominican Republic can produce 20 thousand tons of coffee per year or 10 thousand barrels of rum. Nicaragua can produce 30 thousand tons of coffee per year or 5 thousand barrels of rum. a. Suppose the Dominican Republic and Nicaragua sign a trade agreement in which each country would specialize in the production of either coffee or rum. Which country should specialize in coffee? Which country should specialize in rum? b. The minimum price at which these countries will trade coffee is barrel of rum per ton of coffee and the maximum price is barrel of rum per ton of coffee.

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The Dominican Republic and Nicaragua both produce coffee and rum. The Dominican Republic can produce...

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