7. You are given the information shown in the table about production relationships in Pugelovia and the rest of the world. Inputs per Unit Inputs per Unit of Rice Output of Cloth Output Pugelovia 75 100 Rest of the world 50 50 You make several Ricardian assumptions: These are the only two commodities, there are constant ratios of input to output whatever the level of output of rice and cloth, and com- petition prevails in all markets. a. Does Pugelovia have an absolute advantage in producing rice? Cloth? b. Does Pugelovia have a comparative advantage in producing rice? Cloth? c. If no international trade were allowed, what price ratio would prevail between rice and cloth within Pugelovia? d. If free international trade is opened up, what are the limits for the equilibrium inter- national price ratio? What product will Pugelovia export? Import