1 (1 point). In class we considered a simple example to illustrate comparative advantage with 2 regions producing shirts and bread. Here is a similar example to consider: Let's say there are only two regions: 100 acres of fertile California land and 100 acres of arid Arizona land. There are only two products: cotton and lettuce. The following production relationship between acres and output holds for the two regions: California: 1 acre produces either 4 tons of cotton or 8 tons of lettuce Arizona 1 acre produces either 1 ton of cotton or 1 ton of lettuce a. What is the opportunity cost of producing 1 ton of lettuce in each state? b. If California and Arizona agree to trade, which crop will California grow? Lettuce Cotton Won't trade c. If we assume the 2 regions trade, what could change to make trade non-beneficial? Problem 2. (1 point) Innovation and Market Areas Consider the example we covered in class on factory towns. Figure 2.1 from your textbook is below. How will this figure change if: a) An innovation occurs in production that doubles labor productivity in factories. The market area of the factory will (increase, decrease, not change)