1. Assume that the comparative-cost ratios of two products—

baby formula and tuna fish—are as follows in the nations of Canswicki and Tunata:

Canswicki: 1 can baby formula ≡ 2 cans tuna fish Tunata: 1 can baby formula ≡ 4 cans tuna fish In what product should each nation specialize? Which of the following terms of trade would be acceptable to both nations:

(a) 1 can baby formula ≡ 2 12 cans tuna fish;

(b) 1 can baby formula ≡ 1 can tuna fish;

(c) 1 can baby formula ≡ 5 cans tuna fish? LO40.2