BASKETS OF FRUIT 

Figistan workers BIah workers 

10 

30 

BOARD FEET OF TIMBER 

5 

10 

Productivity of one worker for one month 

a.            Which country has an absolute advantage in the production of fruit? Which country has an absolute advantage in the production of timber? 

b.            Which country has a comparative advantage in the production of fruit? Of timber? 

c.             Sketch the production possibility frontiers for both countries. 

d.            If both countries desired to have equal numbers of feet of timber and baskets of fruit, how would they allocate workers to the two sectors? 

e.            Show that specialization and trade can move both countries beyond their production possibility frontiers.