1.23 If two countries have differing opportunity costs of production for two goods, then: (4 marks) a) each country should specialise in the good for which it has a higher opportunity cost of production. b) only the country with an absolute advantage in the production of both goods stands to gain from trade. c) each country should purchase inputs from the other country in order to gain an absolute advantage. d) each country should specialise in the production of the good for which it has a comparative advantage. 1.24 Study the table below and answer the question that follows. Carpets Fighter aircraft Afghanistan 100 4 US 500 25 An appropriate international exchange ratio that would allow mutually advantageous trade to take place would be: (4 marks) a) 1 aircraft = 25 carpets. b) 1 aircraft = 20 carpets. c) 1 carpet = 0,04 aircraft d) 1 aircraft = 22 carpets. 1.25 The exchange rate between the euro () and the US dollar ($) is $1,20 per euro. If an American tourist in Paris purchases a good valued at 60 euros, then in his own currency this would cost: (4 marks) a) $50 b) $72 C) $48 d) $720