33 The following table is a hypothetical product possibility curves for Canada and Mexico. Before trade Canada is at point C and Mexico is at point B on their respective PPC curves. A B C D E F tof Canada Dairy Foods 500 400 300 200 100 Bicycles 0 50 100 150 200 250 Mexico Dairy Foods 100 80 60 40 20 Bicycles O 50 100 150 200 250 In Canada the opportunity cost of 1 Bicycle is Dairy Foods In Mexico the opportunity cost of 1 Dairy food is Bicycles Canada has a comparative advantage in and therefore should import Assume each country specializes in their area of comparative advantage For trade to occur, the limits of the terms of trade for 1 unit of Dairy food will be * Bicycles. The countries decide to trade 100 units of Dairy Foods for 150 units of Bicycles. Fill in the table to answer the remaining questions. Country/Product Before Trade Specialization Trade After Trade Gains From Trade (Self Sufficiency) (Import/Export) Canada Dairy Foods 300 Bicycles 100 Mexico Dairy Foods 80 Bicycles 50 After trade, In the Canadian Dairy Foods market producers will be happy because they at a Canada may impose a tariff on Mexican imports to Ohelp pay for health costs of Canadians vacationing in Mexico Oaddress health and safety concerns from Mexican products Oimpose the use of the Canada dollar in the Mexican economy Oincrease drug trafficking between the two countries