Question 1 (50%} Part A (25%] a) In the world of Solia there are a two products: Lettuce and Coffee a two countries: Bunnyland and Duane - one production factor: labor We know it takes: a 2 hours to produce 100 pounds of lettuce in Bunnyland - 4 hours to produce 100 pounds of lettuce in Duarte - 1 hour to produce 100 pounds of coffee in Bunnyland - 5 hours to produce 100 pounds of coffee in Duarte a) Determine which country has i)An absolute advantage in the production of lettuce ii) An absolute advantage in the production of coffee i) An comparative advantage in the production of lettuce ii) An comparative advantage in the production of coffee h) Calculate the opportunity cost of producing one more unit of lettuce in Duarte and Bunnyland c) Calculate the relative prices of lettucesfcoffee both in Duane and Bunnyland. d) If free trade is allowed, will there be any trade? Determine what is going to export Duarte and what is going to export Bunnyland. e) Determine the range of relative prices at which trade could happen. f) Graph the PPF and the trade line as done in the lectures. Part B (25%} Instead of only one factor of production. we will consider two factors of production: labor and land. Lettuce production pays 51% cf the total value production in land rents. Coffee production pays 51% of the total value production in wages. Duarte has two-thirds of the total land in the world. while it only has one-third of the total labor. a) Determine the trade ows in) Graph a set of a PPF, indifferent curves. and price lines that show both countries' autarky equilibrium and trade equilibrium. This graph will be a sketch since you lack several details