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The accompanying hypothetical production possibilities tables are for Germany and USA. Each country can produce cars and trucks. a} (5 points} Which nation should specialize

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The accompanying hypothetical production possibilities tables are for Germany and USA. Each country can produce cars and trucks. a} (5 points} Which nation should specialize in which product? Explain briefly why. b} (5 points) What are the limits of the terms of trade? The terms of trade are 1 truck for 1.5 cars. c) (7.5) Draw for US the production possibilities line and the trading possibilities line. d} (7.5) Suppose the optimum product mixes before specialization and trade were alternative C in Germany and alternative L in USA. Suppose that 20 trucks are exchanged for 30 cars. What would be the gains from specialization and trade

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