The UK and Poland both produce cakes and coats.

Suppose that a British worker can produce 50 cakes per hour or 1 coat per hour. Suppose that a Polish worker can produce 40 cakes per hour or 2 coats per hour.

a. Which country has the absolute advantage in the production of each good? Which country has the comparative advantage?

b. If the UK and Poland decide to trade, which commodity will Poland trade to the UK? Explain.

c. If a Polish worker could produce only 1 coat per hour, would Poland still gain from trade? Would the UK still gain from trade? Explain.