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Apply your knowledge of opportunity cost to identify the comparative advantage enjoyed by each country. Now using your knowledge of specialization and trade, show that the two countries can benefit by consuming more of both goods after trade. Develop a multi-paragraph response with a introduction, main section, and conclusion that includes examples and evidence to support your ideas.
Here are some hypothetical numbers used to illustrate the ideas of trade-offs, specialization, and comparative advantage. Assume Sri Lanka, using all her resources efficiently, can produce either 2,500 bags of […]