7. Assume two countries, Cuba and Brazil, each of which can produce sugarcane and tobacco. In each country, all resources are fully utilized and production costs are constant. Under these conditions, when Cuba uses all its resources to produce only sugarcane, it is able to produce 80 tons. However, if Cuba concentrates only on tobacco production, it is able to produce 40 tons. For Brazil, the maximum productions are 60 tons of sugar cane or 60 tons of tobacco : (Chapter 9, M. Dioury) a) Draw the lines (curves) of the possibilities of production of Cuba and Brazil in a graph ? b) Calculate the opportunity cost of a ton of tobacco in Cuba and Brazil. Also calculate the opportunity cost of a ton of sugarcane in each country ? c) In which product should each country specialize ? d) What will be the total production of tobacco and sugarcane in the two countries ? e) Suppose that Cuba produces 10 tons of tobacco and buys 15 tons from Brazil, and that Brazil produces 12 tons of sugarcane and buys 20 tons from Cuba. How much sugarcane and tobacco will be available to each country ? g) What are the terms of trade (prices) that make trade in tobacco and sugarcane profitable for both countries ?