1. Let's assume that we have only two countries: Patelandia has $1000 to produce and Raposoland has $850 to produce. Pate landia - Can produce one football for $20 and one basketball for $35 Raposoland - Can produce one football for $18 and one basketball for $26 Patelandia Raposoland Cast of producing one football Cost of producing one basketball $20 $35 $18 $26 a) Who has the absolute advantage for: a. Footballs b. Basketballs Raposoland Raposoland b) Who has the comparative advantage for (show your work): Patelandia a. Footballs b. Basketballs Raposoland Opportunity Cest of one football Opportunity Cost of one basketball 20/35=0.57 18/26=0.69 Patelandia Raposoland 35/20-1.75 26/18-1.44 c) If the two countries do not trade, and use half of their resources to produce each good, how many units of each good would they produce? Patelandia Raposoland Total Production Footballs 500/20-25 425/18-23 48 Basketballs 500/35-14 428/26-16 30 d) Determine the total production if the two countries specialize and produce what they have a comparative advantage in. Patelandia Raposoland Total Production Footballs Basketballs 1000/20-50 N/A N/A 850/26-32 50 32