Suppose that we are considering the trade between Peru and Ecuador. Suppose that each produce only two goods, and that they each have $120,000 of resources to spend on the production of these goods. Ecuador: 0 Ecuador can produce one unit of oil at a cost of $4 per unit. 0 Ecuador can produce one unit of beef at a cost of $16 per unit. 0 Peru can produce one unit of oil at a cost of $10 per unit. 0 Peru can produce one unit of beef at a cost of $20 per unit. 12. Which country has the comparative advantage in producing oil? Which has the comparative advantage in producing beef? Show your work. [2 points] 13. Draw the Production Possibilities Frontier (PPF) for Peru under autarky. Draw this PPF with oil on the x-axis and beef on the y-axis. Label both the x-intercept and y-intercept. [2 points] Suppose now that Peru and Ecuador start trading with each other at a rate of 3 units of oil for 1 unit of beef. 14. Draw the Production Possibilities Frontier (PPF) for Peru under this trade agreement. Again, draw this PPF with oil on the x-axis and beef on the y-axis. Label both the xintercept and y intercept. [2 points]