I need a picture of the graphs to help you.
It will cause a change in the quantity demanded. There will be the same demand, but if the price goes up less people will buy the papayas.
(a) Microville has the absolute advantage producing cars. Because the most it can produce is 10 while Macroville can only produce 5.
(b) The opportunity cost is 5 cars if Macroville decides to use all of its resources and produce 20 boats.
(c) Microville has the comparative advantage in producing cars? Because its opportunity cost for 1 car is 1 boat while Macroville's cost for 1 car is 4 boats.
(d) If each country were to specialize in producing either cars or boats and then trade for the other product, Macroville makes 20 boats and Microville makes 10 cars. Each country produces the goods it has a comparative advantage in. Cars for Microville and boats for Macroville.
