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4. The following figures represent the amount of bananas and sugarcane that Panama and Honduras can produce with a fixed amount of factor inputs. Bananas

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4. The following figures represent the amount of bananas and sugarcane that Panama and Honduras can produce with a fixed amount of factor inputs. Bananas Sugarcane Panama 100 50 Honduras 160 40 a. Which country has the absolute advantage in bananas? Which country has the absolute advantage in sugarcane? Explain how you arrive at that answer? ( 13) b. Explain how to calculate per unit opportunity cost. What is Panama's opportunity cost for producing one unit of bananas? What is Honduras's opportunity cost for producing one unit of sugarcane? (_ 13 ) c. Which country has the comparative advantage in bananas? Which country has the comparative advantage in sugarcane? Explain how you got your answers ( /3) d. Identify a terms of trade that benefits both countries? Explain why this will benefit Panama ( 13)

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