Morocco and Tunisia both have Mediterranean climates that are excellent for producing/harvesting green beans and tomatoes. In Morocco it takes two hours for each worker to harvest green beans and two hours to harvest a tomato. Tunisian workers need only one hour to harvest the tomatoes but four hours to harvest green beans. Assume there are only two workers, one in each country, and each works 40 hours a week. a. Identify which country has the absolute advantage in green beans and which country has the absolute advantage in tomatoes.

b. Identify which country has comparative advantage in which product.

c. Initially each country used ½ of the workers in producing green beans and tomatoes. If each country specializes based on comparative advantage find an exchange mechanism so that both gain from trade.

*SUBJECT: Economics*