Q1. Fadi can produce 10 baklavas, a Turkish pastry, or 250 bars of chocolate an hour. Hania can produce 30 baklavas or 90 bars of chocolate an hour.

a)Calculate Fadi's opportunity cost of a baklava and Hania's opportunity cost of a baklava.

b)If each spends 30 minutes of each hour baking baklavas and 30 minutes producing chocolate, how many baklavas and chocolate bars does each produce?

c)Who has a comparative advantage in producing (i) baklavas and (ii) chocolate?

d)Draw a graph of Fadi's PPF and Hania's PPF and show the point at which each produces when they spend 30 minutes of each hour producing baklavas and 30 minutes producing cakes.

e)On your graph, show what Fadi produces and what Hania produces when they specialize.

f)When they specialize and trade, what are the total gains from trade?

g)If Fadi and Hania share the total gains equally, what trade takes place between them?