Hats Pairs of shoes 

Troll Land 100 300

Smurf Kingdom 320 80

The Production Possibilities schedule above shows the quantities of hats and shoes that two countries, Toll Land and the Smurf Kingdom can create using equal amounts of resources.

1. Explain which country has an absolute advantage over the production of shoes.
2. Using the concept of opportunity cost, explain which country has a comparative advantage in the production of shoes. Please show your work.
3. If the two countries decide to specialize and trade with each other, identify which country would import hats.
4. Explain if the Smurf Kingdom would benefit from trade with Troll Land if the terms of trade were 1 hat for 1 pair of shoes. Please explain why they would benefit.