Assume that it takes workers in Bangladesh 2 hours to produce one unit of wheat or 6 hours to produce one unit of cloth. In the United States, it takes a worker 1 hour to produce a unit of wheat or 5 hours to produce a unit of cloth. Assume both countries have the same number of worker-hours to devote to making either good.

a) What is the opportunity cost of producing a unit of wheat in either country?

b) What is the opportunity cost of producing a unit of cloth in either country?

c) Who has the absolute advantage in producing wheat? Cloth?

d) Who has the comparative advantage in producing wheat? Cloth?

e) What range of trade ratios (units of cloth per unit of wheat) will both countries find acceptable to take advantage of their comparative advantage and trade with one another?