Question: Suppose that Maria buys a new machine for making sweaters that enables her to make 25 sweaters an hour. (She can only produce 100 scares

Suppose that Maria buys a new machine for making sweaters that enables her to make 25 sweaters an hour. (She can only produce 100 scares per hour) In one hour, Sally can produce 50 scares or 5 sweaters.

A. Who has the comparative advantage in producing sweaters?

B. Can Sally and Maria gain from trade?

C. Would Sally and Maria be willing to trade 2 sweaters for 30 scarves?

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