1. Suppose in a hour, 10kg of rice and 5 meter of cloth is produced in India, and 5kg and 2 meter in Thailand. Using opportunity costs, explain which country should export cloth and which should export rice. (10 mark) 2. Why do government set the living standards of the people by setting the minimum wage? (10 mark) 3. Suppose Mike and Johnson produce two products hamburgers and T-shirts, Mike produces 10 hamburgers of 3 T-shirts a day and Johnson produces 7 hamburgers or 4 T-shirts. Assuming they can devote time to making either hamburgers of T-shirts. (10 mark)

a. Draw the production possibility curve b. Who enjoys the absolute advantage of producing both? c. Who has a higher opportunity cost of making T-shirts d. Who has a comparative advantage in producing hamburgers?