The nation of Alika has400units of labor, each of which can produce either2coconut pies or2pineapple cakes; the nation of Beretania has800units of labor, each of which can produce either1/2of a coconut pie or2pineapple cakes.Assume that coconut pies and pineapple cakes can be produced in fractional (not just integer) numbers.

a) Which country has the comparative advantage in each good?Briefly explain how you know.

b) Suppose that, with international trade,1coconut pie can be traded for2pineapple cakes.Draw carefully-labeled Production Possibility Curves for Alika and for Beretania, both without and with international trade; use your diagrams to illustrate (and also explain in words) how both countries can benefit from trade.