Comparative Advantage and Production Possibilities Consider the following Production Possibilities Frontiers for the United States and China. Presently both countries are producing and consuming both goods as shown by points a in the figure. Panel A Panel B United States China 1000 800 600 Millions of Blouses Annually Millions of Blouses Annually 400 400 250 200 200 200 400 600 800 1000 0 200 400 600 800 1000 Millions of Drills Annually 250 Millions of Drills Annually Define comparative advantage: 16. What is the cost of a drill in terms of blouses per drill in the US? 17. Which country has a comparative advantage in drills? 18. Which country is the least cost (opportunity cost) producer of blouses? Assume each country specializes and produces only the product for which it has a comparative advantage. 19. Which country would produce drills? How many? 20. Which country would produce blouses? How many?21. Are both countries better 013'? (3.125: no) 22. What is the quantity ofexpons iron: the US to China? 23. What is the quantity of exports from China? 24. What is the gain to China om trade? 25. What is the gain to the US from trade