Q//Assume the following information shows the output of 2 goods in 2 countries before specialization. [Also assume that the same amount of resources are used by both countries and are equally divided between their two industries, A and C.]

Automobiles Computers

U.S. 20 15

Germany 15 5

1- Which country has the absolute advantage in automobile production? Why?

2-In Germany, the opportunity cost of producing 1 automobile is the loss of _________.

3-Which country has the comparative advantage in automobile production? Why?

4-If both countries produce according to the respective comparative advantages, what goods will the U.S. and Germany end up producing after specialization?