INTERNATIONAL TRADE

QUESTION 1(a) Consider the following scenarios: Scenario A South Africa Namibia Gold [ ton/hr] 8 2 Fish [ ton /hr] 2 4 Scenario B South Africa Namibia Gold [ ton/hr] 4 Fish [ ton /hr] 2 (a) For Scenarios A and B, in which commodity does South Africa and Namibia have an absolute advantage and absolute disadvantage? Explain. (b) For scenarios A and B, indicate the commodity in which South Africa and Namibia have a comparative advantage and disadvantage. [You must show your workings] (C) In scenarios A and B, determine, using the classical theories, whether trade is possible between South Africa and Namibia and explain what the pattern of trade will be. (d) If South Africa exchanges 8 tons of gold for 8 tons of fish with Namibia (i) How much does South Africa gain in terms of fish? (ii) How much does Namibia gain in terms of fish? Clearly show how you arrived at your answer. (ii) What is the range for mutually beneficial trade