14. With equivalent resources, Belgium can produce 5,000 chocolate bars or 2,500 pounds of almonds in a month.The Netherlands can produce 7,500 chocolate bars or 1,500 pounds of almonds in a month. Assume chocolate bars and almonds are complementary goods.

a. Assume that these are the only two products these countries produce and that resources in the countries are not perfectly substitutable.Draw a PPF for each country (please try to draw your models to scale) (____/4).

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

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

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

e. What would be anacceptable terms of tradethat benefits both countries?Explain. (____/2)

f. Assume that Belgium develops new technology that makes growing the key ingredient for chocolate bars cheaper.Draw a supply and demand model for Belgium's chocolate bars market that reflects this new situation. What determinant caused the change in the model? Also draw the change on your original Belgium PPF model. (____/3)

g. Assuming the price of chocolate bars drops in Belgium because of the events in part f above, what would happen to the supply and demand model for the almonds market in Belgium? Show this change on a supply and demand model. (____/2)