10. Guam can produce 24,000 apples or 48,000 calculators in a year with 10,000 workers. The United States can produce 90,000 apples or 30,000 calculators in a year with 10,000 workers.

a. Assume that these are the only two products these countries produce and that there is no specialization. Draw a PPF for each country (be sure your models are drawn to scale) (____/4).

b. Which country has an absolute advantage in the production of apples? Explain. (____/1)

c. Which country has an absolute advantage in the production of calculators? Explain. (____/1)

d. Which country has a comparative advantage in the production of calculators? Explain. (____/2)

e. What would be an acceptable rate of trade that benefits both countries? Explain. (____/1)

f. Given the rate of trade you used above, plot a precise point labeled "a", which represents the consumption possibility for Guam if such a rate of trade prevails. Assume Guam will only produce the item it has a comparative advantage in and will keep 1/3 of it while trading the other 2/3 (show your work to get full credit). (____/3)

g. Pretend you are the spokesperson for the Guam Apple Marketing Consortium. What is a normative statement to include in a letter to your congressional representative on your opinion of free trade with the USA. (____/1)