(Solution) - Suppose that the price of a commodity is 3 50 in -(2025 Original AI-Free Solution)

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Suppose that the price of a commodity is $3.50 in the United States and ?4 in the European Monetary Union and the actual exchange rate between the dollar and the euro is R = $1/?1, but, the equilibrium exchange rate R? = $0.75/?1.
(a) Will the United States import or export this commodity?
(b) Does the United States have a comparative advantage in this commodity?