Question 1 Costa Rica and Panama both produce avocados and bananas. Each country in endowed with a fixed amount of labor and has a unit labor requirement for producing each product. Costa Rica is endowed with 14,000 units of labor, and Panama is endowed with 6,000 units of labor. The unit labor requirements are given as: Costa Rica Panama Unit Labor Requirement for aA=0.70 aA=0.75 Avocados Unit Labor Requirement for ag=0.50 As=0.25 Bananas Part (i): Which country has the absolute advantage in the production of avocados? A. Costa Rica B. Panama Part (ii): Which country has the absolute advantage in the production of bananas? A. Costa Rica B. Panama Part (iii): Which country has the comparative advantage in the production of avocados? A. Costa Rica B. Panama Part (iv): Which country has the comparative advantage in the production of bananas? A. Costa Rica B. Panama Part (iv): Technological improvement and capital accumulation in a particular sector leads the unit labor requirement to fall in that particular sector, and such changes to the productivity of workers could ultimately affect comparative advantages and the direction of trade. In which two sectors (of the four presented in the table above) could a reduction in the unit labor requirement flip the comparative advantages? Explain your