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a. Which country has an absolute advantage in production of each good? And which country has the comparative advantage in textile production? And grain production?

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a. Which country has an absolute advantage in production of each good? And which country has the comparative advantage in textile production? And grain production? Show how you determined your answer for full credit. Note: in autarky, each country chooses to produce and consume both goods in the following amounts. This point is on their respective PPF and is efficient. b. Assume that they agree to trade and begin by first producing only the good in which they have a comparative advantage. Show the level of production in a table. c. Assume that the terms of trade are 1 grains for 1 textile and that that Ecuador sends 60 units of grain to Chile. Calculate the level of consumption for both countries in both goods after trading. Show this in a table

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