6.01 COMPARATIVE AND ABSOLUTE ADVANTAGE Economics Time to practice calculating comparative and absolute advantage! For this assignment, assume there are only two countries in the world and that each country only produces two products. Part 1: Wool and Chocolate Country Wool Chocolate New Zealand 6,000 tons 3,000 tons Belgium 3000 tons 8,000 tons 1. List the countries and the product in which each has the absolute advantage: Enter your response for Question 1 here 2. Calculate the opportunity cost of each product for each country. You may want to review the lesson and have your Economics Formula Sheet handy: Country Wool Chocolate New Zealand Enter response here in tons Enter response here in tons Belgium Enter response here in tons Enter response here in tons 3. List the countries and the product in which each has the comparative advantage. You may want to check your work using the economics hack of cross-multiplying: Enter your response for Question 3 here 4. If the countries decide to specialize in one product and trade, how much wool and chocolate is produced? Enter your response for Question 4 here Part 2: Spaghetti and Meatballs Country Spaghetti Meatballs Italy 1,500 tons 2,000 tons Argentina 1,000 tons 1,000 tons 1. Which country has an absolute advantage in both products? Enter your response for Question 1 here 2. In atleast one paragraph, explain whether or not the countries should specialize in one product and trade. Make sure to use the terms opportunity cost and comparative advantage in your answer. (Don't forget to use the economics hack to check your work!) Enter your response for Question 2 here