1. The table below shows the production possibilities of two countries, Cyprus, and Lebanon, of two goods, smartphones, and apples, given a fixed amount of resources.

2. Smartphones Apples

Cyprus 393,940 131,315

Lebanon 484,850 242,425

a. Which country has the absolute advantage in smartphones, and which has the absolute advantage in apples?

b. Calculate Cyprus's opportunity cost of smartphones in terms of apples

c. If the two countries were to specialize and trade with one another, which country would import smartphones?

d. Assume the countries decide to specialize and trade and settled on a trading price of 2.5 smartphones per apple. Explain why the country that specializes in apples would experience gains from trade.