Question: Two countries, A & B, are each able to produce two products, widgets and zercs. Country A can produce 90 widgets or 45 zercs,

 Two countries, A & B, are each able to produce two products,

Two countries, A & B, are each able to produce two products, widgets and zercs. Country A can produce 90 widgets or 45 zercs, or some combination of the two. Country B can produce 100 widgets or 100 zercs, or some combination of the two. Currently, Country A is consuming 60 widgets and Country B is consuming 60 widgets. Both countries agree that any gains from specialization will be shared equally. Also, the world-wide production of neither good may fall as a result of specialization. Fill in the blanks below. Use the cell numbers in the table as a guide. (For blanks requiring a fraction, please use a decmial, for exemple, use .5 for 12, .33 for 13 and 25 for 14). Consumption Before Spec. Production After Spec. Domestic Cost Consumption After Spec. Ratios Country Comp. Adv. A 2 13 14 19 20 #3 6 10 15 16 21 22 Worldwide Total 11 12 17 18 23 24 The cost of producang one wdget in Courtry Ais #1 zerc(s) widget(s). zerc(s) widget(s). The cost of producang one zerc in Country As 2 The cost of producing one wdget in Country Bis 3 The cost of producing one zerc in Country 8 is 4 Courtry A has the comperative advantage in the production of #5 (onter Wor 2) Country B has the comparative edvantage in the production of (enter Wor 2)

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