Refer to Table 2 and answer the following questions: i. Plot on graph paper the production possibilities frontiers (PPF) of Malaysia and Thailand [Note: Tyre in your Y-axis and glove in your X-axis)? Are the two PPF curves linear or concave. Identify the reason for the shape of the PPF curves that you have drawn. ii. In the absence of trade (autarky), Malaysia's production and consumption points along its PPF curve are expected to be 500 cartons of gloves and 600 tyres. Draw a line tangent to Malaysia's autarky point, and from it, determine the relative commodities price of tyre (or marginal rate of transformation, MRT) (show the working in the diagram how you derived the relative commodities price of tyre). iii. In the absence of trade, Thailand's production and consumption points along its PPF are supposed to be 200 cartons of gloves and 800 tyres. Draw a line tangent to Thailand's autarky point, and from it, determine the relative commodities price of tyre (show the working in the diagram how you derived the relative commodities price of tyre). iv. Based on the relative commodities price of each country found in part (ii) and (iii), which is the commodity of comparative advantage for each country? Why? Is the specialisation in this case a complete or incomplete specialisation? v. The process of specialisation in the production of gloves and tyres continues in Malaysia and Thailand until their relative commodities prices become equal. With specialisation. a. Refer to Table 2, how many cartons of gloves and tyres are more likely to be produced by Malaysia? b. Refer to Table 2, how many cartons of gloves and tyres are more likely to be produced by Thailand? c. How much are the combined production gains for the two countries after specialisation?

Table 2: Rubber production Malaysia Thailand Glove (cartons) Tyre Glove (cartons) Tyre 520 0 1200 0 500 600 900 400 350 1100 600 650 200 1300 200 800 0 1430 0 810