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Consider the case of two countries, Afghanistan and the US, both producing carpets and fighter aircraft. The table below shows output rates per day in

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Consider the case of two countries, Afghanistan and the US, both producing carpets and fighter aircraft. The table below shows output rates per day in the two countries if all resources are fully and efficiently employed. Use this information to answer Questions 4, 5 and 6. Carpets Fighter aircraft Afghanistan 100 4 US 500 25 4. Based on this information, (* * ) a. there is no opportunity for mutually beneficial trade between the two countries. b. Afghanistan has an absolute advantage in the production of both goods. c. Afghanistan should import carpets from the US. d. Afghanistan has a comparative advantage in the production of aircraft. e. the US should export fighter aircraft to Afghanistan. 5. An appropriate international exchange ratio that would allow mutually advantageous trade to take place would be a. 1 aircraft = 25 carpets. b. 1 aircraft = 20 carpets. C. 1 carpet = 4 aircraft. d. 1 carpet = 0,04 aircraft. e. 1 aircraft = 22 carpets

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