Question: 1. If trade occurs between Narnia and Somosa, which nation should export which product? Why? 2. What are the limits of the terms of

1. If trade occurs between Narnia and Somosa, which nation should export

1. If trade occurs between Narnia and Somosa, which nation should export which product? Why? 2. What are the limits of the terms of trade between Narnia and Somosa? 3. Assume that prior to specialization and trade, Narnia and Somosa chose production possibility "C." Now each specialized according to comparative advantage. What will be the resulting gains from trade? Explain. A B. Computer Chips Fuel Injectors E. 80 60 40 20 20 40 60 Somosa Production Possibilities: A B. C. Computer Chips Fuel Injectors 40 30 20 10 20 40 60 80

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