QUESTION 5 [20 Marks] Suppose that two companies, Baple Inc. in Canada and Sungsam Inc. in South Korea produce and sell smartphones components. Baple has 100,000 employees and Sungsam has 200,000. To simplify, suppose the only productions of these firms are microchips and LED displays. One worker at Sungsam can produce either 150 microchips or 200 displays in a given year. A worker at Baple can produce either 300 displays or 50 microchips in a given year. (A) [5 Marks] Suppose a trade deal between Canada and South Korea now allows Baple and Sungsam to trade smartphone components. Some Sungsam Inc. board members argue that, as it is the market leader, has the largest workforce and can produce the largest output of both components, it should never trade components with Baple. They recommend continuing exclusively production of both microchips and LED displays in- house. Are the board members right? Explain. The Baple has 10oooo employees, so they can produce 30000000 disbye or soooooo microchips in year. and the Sungsam has 20000. employees, So they Can Produce 30000000 mic-lips of 40000000 displays. The. sungsam has both absolute advantage, but the DC- meup get ock= = och= ] oct . ocs= +, so the opportunity cost of Baple smaller than or of sungsome so -Baple has comparative Microchips microchips advantage of microchips , so they can trade , the band menters wrong.(B) [5 Marks] Bapie and Sungsam executives convince their respective boards to enter trade negotiations. One proposal on the table is to exchange 5 displays for 1 microchip. is that proposal likely to be accepted by both companies' boards? Explain. (C) [6 Marks] Plot the total PPF graph for Baple and Sungsam and show how many Microchips and LCD Displays each firm produces if the market needs 50 million Displays. M I .. The Baple just Produce P(D) [4 Marks] What is the opportunity cost of producing one more display if Baple and Sungsam are operating at full capacity and producing 50 million LCD Displays? correct but why