2. Canadian and Japanese workers can each produce 4 cars per year. A Canadian worker can produce 10 tonnes of grain per year, whereas a Japanese worker can produce 5 tonnes of grain per year. To keep things simple, assume that each country has 100 million workers.

a. For this situation, construct a table analogous to panel

(a) in Figure 3.1.

b. Graph the production possibilities frontier of the Canadian and Japanese economies.

c. For Canada, what is the opportunity cost of a car? Of grain? For Japan, what is the opportunity cost of a car? Of grain? Put this information in a table analogous to Table 3.1.

d. Which country has an absolute advantage in producing cars? In producing grain?

e. Which country has a comparative advantage in producing cars? In producing grain?

f. Without trade, half of each country's workers produce cars and half produce grain. What quantities of cars and grain does each country produce?

g. Starting from a position without trade, give an example in which trade makes each country better off.