4.Based on Table 4, answer the following questions: -

Table 4: The Production of Flour and Sugar

Country Flour Sugar

Vietnam 4,500 6,100

Korean 2,700 1,700

a. Define absolute advantage and comparative advantage.

(2 marks)

b.According to the absolute advantage, which country should produce flour

and sugar?

(1 mark)

c.Based on the comparative advantage theory, calculate the opportunity cost

and state the line of specialization for each country.(6 marks)

d.Construct the table after specialization for both countries.

(2 marks)

e.Suggest a term of trade that will benefit both countries.

(4 marks)