Question: 2. (20 points} Consider two countries: Indonesia and Mauritius, and two goods: palm oil and t~shirts. In Mauritius, a. gallon of oil costs 6 labor

 2. (20 points} Consider two countries: Indonesia and Mauritius, and two

2. (20 points} Consider two countries: Indonesia and Mauritius, and two goods: palm oil and t~shirts. In Mauritius, a. gallon of oil costs 6 labor hours to produce} while a t-shirt costs 2 labor hours. In Indonesia1 a. gallon of oil costs 2 labor hours to produce, while a t-shirt costs 1 labor hour. (a) (5 points} Does any country have an absolute advantage? Why or why not? (1)) (10 points) Which country has a comparative advantage in each good? What will each country export / import? Justify your answer by computing the relative price of each good in each country. (c) (5 points} Choose an international relative price of a gallon of oil in terms of t-shirts for which it makes sense for both countries to trade. Show how each country can save on hours of work by trading with each other

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