Suppose that there are 10 million workers in Canada and South Korea and each worker in Canada and South Korea can produce 4 cars per year.

            (a)        Graph the production possibilities frontier of the Canadian and South Korean economies. (6 Mark)

(b)      For Canada, what is the opportunity cost of a car? What is the opportunity cost for grain? For South Korea, what is the opportunity cost of a car? For grain? (8 Marks)

(c)        Which country has an absolute advantage in producing cars? In producing grain.(2 Mark)

(d)        Which country has a comparative advantage in producing cars? In producing grain. (2 Mark)