The countries of Tutland and Pooka-Pooka produce winter boots and sunglasses. Each has a linear production possibility curve. Tutland can produce 500 winter boots and zero sunglasses, or 250 sunglasses and zero winter boots. Pooka-Pooka can produce 400 winter boots and zero sunglasses, or 400 sunglasses and zero winter boots.

Tutland is currently producing 250 winter boots and 125 sunglasses. Pooka-Pooka is currently producing 200 winter boots and 200 sunglasses. If they specialize based on comparative advantage, how many more winter boots and sunglasses will they have in total compared to the current situation?

Select one:

A. 400 more winter boots; 250 more sunglasses
B. 50 more winter boots; 75 more sunglasses
C. They will not have any more than they currently have.
D. 500 more winter boots; 400 more sunglasses

Explanation: Based on comparative advantage, Tutland should specialize in producing sunglasses while Pooka-Pooka specializes in producing winter boots. If they do so, Tutland will produce 400 winter boots and 400 sunglasses, while Pooka-Pooka produces 200 winter boots and 400 sunglasses. This results in a total of 600 winter boots and 600 sunglasses produced between the two countries, which is 200 more winter boots and 200 more sunglasses than the current situation. Therefore, the correct answer is d - 500 more winter boots; 400 more sunglasses.

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