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Suppose the US and Mexico both produce semiconductors and auto parts and the US has a comparative advantage in semiconductors while Mexico has a comparative advantage in auto parts. Also suppose the US has an absolute advantage in the production of both semiconductors and auto parts. The US should:
a. not trade semiconductors and auto parts with Mexico.
b. export semiconductors to Mexico and import auto parts from Mexico.
c. import semiconductors from Mexico and export auto parts to Mexico.
d. export both semiconductors and auto parts to Mexico.
importance of product differentiation
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