1.Use the information in the table below to answer the following questions.

US Argentina

Wheat 200 20

Beef 100 80

(a)Does either country have an absolute advantage in the production of wheat or beef? Explain.

(b)What is the opportunity cost of wheat in each country?

(c)What is the opportunity cost of beef in each country?

(d) Analyze comparative advantage and opportunities for trade between the U.S. and Argentina.

2. The following table shows the automobile and rice that the China and the Vietnam can produce with one hour of time

Labor productivity China Vietnam

Automobile (car/hour) 4 2

Rice (ton/hour) 5 3

a.Determine which commodity the China and Vietnam has the absolute advantage, comparative advantage.

b.Identify the pattern of trade and the interval that international trade ratio settles in?

c.Assuming that without trade, each country has 10 hours of working in which it spends 5 hours for automobile and 5 hours for rice production; with trade, two countries agree the international trade ratio at 1 car = 1.5 tons of rice, draw 2 diagrams for the two countries to illustrate the gain from international trade.