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

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

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 example, use .5 for 1/2, .33 for 1/3 and .25 for 1/4.). Domestic Cost Consumption Production Consumption Ratios Before Spec. After Spec. After Spec. Country W Z Comp. Adv. W Z W Z W Z A #1 2 5 7 8 13 14 19 20 B #3 4 6 9 10 15 16 21 22 Worldwide Total 11 12 17 BI 23 24 The cost of producing one widget in Country A is #1 zerc(s). The cost of producing one zerc in Country A is #2 widget(s). The cost of producing one widget in Country B is #3 zerc(s). The cost of producing one zerc in Country B is #4 widget(s). Country A has the comparative advantage in the production of #5 enter W or Z) Country B has the comparative advantage in the production of #6 enter W or z )

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