(a) Assume that prior to trade, Malaysia was producing 2 units of cars and 40 units of electronics. What can you conclude about the use of resources in Malaysia? Explain using the production possibilities curve model.

(b) Which country has the comparative advantage in the production of electronics? Explain using numbers.

(c) Now assume each country specializes in the production of goods in which it has a comparative advantage, and the terms of trade are 6 units of electronics for 1 unit of cars. Are these terms of trade mutually beneficial? Explain.

(d) Assume Malaysia and Japan are able to double the production of cars. Which country now has the absolute advantage in the production of cars? Explain using numbers.

(e) Assume Japan's civilian working-age population is 350 million, the labor force participation rate in Japan is 80%, and the unemployment rate is 10%. Calculate the number of unemployed people in Japan. Show your work.

Cars (units Japan's 25 PPC 10 Malaysia's PPC 0 100 Electronics (units)