Using the data in the accompanying table, answer the following questions:

1. For which good does Canada have a comparative advantage?
2. For which good does Italy have a comparative advantage?
3. What might be a set of favorable terms of trade for the two countries?
4. Prove that both countries would be better off in the specialization-trade case than in the no-specialization-no-trade case.

References Mailings Review View Acrobat ) Tell me v i= V - v 141 Av Lv Av = Styles Styles Dictate Editor Pane Unit 3 Short-Answer Assignment Name: 1. Using the data in the accompanying table, answer the following questions: a. For which good does Canada have a comparative advantage? b. For which good does Italy have a comparative advantage? c. What might be a set of favorable terms of trade for the two countries? d. Prove that both countries would be better off in the specialization-trade case than in the no-specialization-no-trade case. Points on Production CANADA ITALY Possibilities Frontier Good X Good Y Good X Good Y 100 50 120 180 2. Suppose the U.S. government wants to curtail imports due to a very large trade deficit. Would it be likely to favor a tariff or a quota to accomplish its objective? Why? English (United States) 12 Accessibility; Good to go Focus English (United States) 12 Accessibility: Investigate Focus