The table below shows the production possibilities curves for two countries: China and the United States. Using equal amounts of resources, China can produce 200 computers or 400 cars, whereas the United States can produce 200 computers or 1,200 cars.

(a) Calculate the opportunity cost of a computer in China.

(b) If the two countries specialize and trade, which country will import computers? Explain.

(c) If the terms of trade are 4 cars for 1 computer, would trade be advantageous for each of the following?

(i) United States

(ii) China

(d) If productivity in China doubles, which country has the comparative advantage in the production of cars?