If 100% of time is spent on the production of one crop	Self sufficiency
	Potatoes (kg)	Oats (kg)	Potatoes (kg)	Oats (kg)
Freya	1000	400	300	250
Calum	800	1000	350	400

a.) Does either individual have an absolute advantage in producing potatoes? What about oats? Explain your answer.

b.) Which individual has the comparative advantage in producing potatoes? Explain your answer by calculating the opportunity cost for producing potatoes for both Freya and Calum.

c.) Interpreting your answer to part (b), which crops should each individual specialise in producing over the next year?

d.) Calculate the gains/losses for each individual (for both potatoes and oats) when they switch from self-sufficiency to specialising in the crop for which they have a comparative advantage.

e.) What is the fair trading price? Give your answer to 2 decimal places. (Hint: equate one individual's total surplus to the total surplus of the other individual.)

f.) Using this fair trading price in part (e), Freya suggests the following trade: 400kg of the crop she is not specialising in, in return for an amount (as per the fair trading price) of the crop she is specialising in. Should Calum accept this trade? What amount of both crops would Freya and Calum have if they do undertake this trade at the fair trading price? Has specialisation increased total output if this trade takes place? Explain your answer.