Problem:
Techland and Clothworld are two countries with the same number of workers. In Techland each worker can produce 4 units of technology OR 4 units of clothing. Each resident in Techland currently consumes 2 units of technology and 2 units of clothing. In Clothworld each worker can produce 3 units of technology OR 12 units of clothing. Clothworld's residents consume 1 unit of technology and 8 units of clothing. (pretend each country only has one worker each, it makes the math easier.)
1. Does either country have an absolute advantage?
2. Which country has a comparative advantage in technology and by what amount.
3. Which country has a comparative advantage in clothing and by what amount.
4. Is there a basis for trade? If so, what would be an example (using numbers) of trade that would benefit both countries. (Keep each country's consumption of the good they DO have a comparative advantage in the same as before trade occurs, and see if trade lets them consume more of the other good). ASSUME DIRECT TRADE, NO "MIDDLE MAN".