Based on the information given, it can be noted that Country Y has an absolute advantage in the production of solar panels.
<h3>
Absolute Advantage.</h3>
In this case, country Y can produce more solar panels than country X. Therefore, it has an absolute advantage.
The opportunity cost of a furnace in Country Y will be 2 solar panels per furnace. This is what has to be foregone.
Also, it should be noted that country X has a comparative advantage in producing furnaces.
Lastly, when the terms of trade were that 2 furnaces are exchanged for 1 solar panel, Country X should produce solar panels domestically.
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