Consider the two linear Production Possibilities Frontiers (PPF) shown below. The production possibilities for the countries of Oceana and Eurasia are illustrated For the sake of simplicity, each country produces two goods along its PPF: Good A and Good B. Gog? " ' ' gong 0cm M PPF '15 R5 _. B . 1. Which country has the comparative advantage in producing Good A? Eurasia 2. Which country has the comparative advantage in producing Good B? Oceana 3. Notice prespecialization and pre-trade world output. How many units of each good is produced worldwide? Fill in the blank cells in the rst row of the table below. 4. Consider world output after each nation specializes in that good in which it has a comparative advantage. Fill in the blank cells in the second row of the table below. 5. Compare and discuss in which ways the world is better off. ERA WORLD OUTPUT GOOD A WORLD OUTPUT GOOD B PRETRADE 65 units of A 260 units of B WORLD TRADE AND 75 units of A (Eurasia) 320 units of B (Oceana) SPECIALIZATION