Hungary has a long clock making history. Hungary recently opened to trade and

experienced a surge in the imports of clocks once it opened to trade. Many clockmakers

were put out of work and begin to stage protests in front of the parliament building by

filling the square with ticking clocks and chanting "Time has run out for this

administration." The Prime Minister of Hungary has hired you as an advisor. Your first job is to explain to him why opening to trade and allowing imports of clocks is actually good for the country according to the theory of comparative advantage.

a. Please define comparative advantage, and explain to the clockmakers how and why

Hungary will benefit overall from free trade according to opportunity costs and the theory

of comparative advantage.

b. While your explanation is helpful in a broad sense, the Prime Minister still needs to know how the government can help the clockmakers specifically. Please recommend to him two policies his government can do to help the clockmakers.