In USA one unit of labor can produce 25 computers or 25 bushels of wheat. In Thailand one unit of labor can make 30 computers or 50 bushels of wheat. Assume that computers and wheat are the only two goods in the world. (What is the purpose of this assumption?) a. What is USA's opportunity cost of making a computer? What is Thailand's opportunity cost of making a computer? b. What is USA's opportunity cost of producing a bushel of wheat? What is Thailand's opportunity cost of producing a bushel of wheat? c. Does USA have comparative advantage in producing anything? Explain. d. Does Thailand have comparative advantage in producing anything? Explain. e. Is it possible for USA to gain by trading with Thailand? Explain. f. Is it possible for Thailand to gain by trading with USA? Explain. h. Do you think they can trade? (HINT: outside of PPF)

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