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Unformatted text preview: Mexico Socks 3/5 bball bball Baseballs 5/3 socks 4/3 socks AA for Mexico in both. CA for China in socks and CA for Mexico in bballs. China will only trade if cheaper than doing themselves implies <5/3 socks for bballs Mexico will only trade if cheaper than doing themselves implies >4/3 socks for bballs Therefore world trading price has to be 1 baseball for between 5/3 and 4/3 socks. Socks baseballs baseballs Socks 30 60 80 China Mexico 50 1...
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- Fall '07
- Comparative Advantage