resident in Widgetland

1. Will a country do better importing or exporting a good for which it has a comparative advantage? Why?
2. Widgetland has 60 workers. Each worker can produce 4 widgets or 4 wadgets. Each resident in Widgetland currently consumes 2 widgets and 2 wadgets. Wadgetland also has 60 workers. Each can produce 3 widgets or 12 wadgets. Wadgetland’s residents consume 1 widget and 9 wadgets. Is there a basis for trade? If so, offer the countries a deal they can’t refuse.

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