1. Explain what is a Production Possibility Frontier (PPF)? Provide a real world example when the economy might be producing inside the PPF, on the PPF and outside the PPF. 2. In a circular flow diagram, what do households provide to the market for factors of production and what they get in return? Also what do firms seek from the market for factors of production and what they have to give in return? 3. What are the differences between the two trade theories i.e., comparative advantage and absolute advantage? Can a country have a comparative advantage and absolute advantage in two goods at the same time compared to another country? 4. Refer to the table below for two countries: Jordan and Egypt who produces tables and chair with their given resources and technology. Labor hours needed to make 1 unit of Table Labor hours needed to make 1 unit of Chair Jordan 1 2 Egypt 2 3 Based on the table calculate/explain (make sure to show all the math) Which country has an absolute advantage in tables and which country has an absolute advantage in chairs? Which country has a comparative advantage in tables and which country has a comparative advantage in a chair? After the trade, which country should export tables to the other country? Also which country should be exporting chairs to the other country