Final answer:
Geppetto has the comparative advantage in producing puppets and Lewis has the comparative advantage in producing puzzles. A beneficial range for trade between Geppetto and Lewis is 2 puzzles per puppet to 5 puzzles per puppet, which aligns with their respective comparative advantages.
Step-by-step explanation:
The question concerns the concept of comparative advantage in the production of two types of goods: puppets and puzzles. To determine comparative advantage, we analyze the opportunity cost of producing one good over the other for each producer, Geppetto and Lewis.
Geppetto has a lower opportunity cost for producing puppets because he sacrifices fewer puzzles to produce additional puppets than Lewis does. Specifically, Geppetto gives up 20 puzzles to produce 20 puppets, whereas Lewis would have to give up 50 puzzles to produce 25 puppets. Therefore, Geppetto has the comparative advantage in producing puppets. Conversely, Lewis has a comparative advantage in puzzles because he sacrifices less puppets to produce additional puzzles than Geppetto. For example, to produce 10 more puzzles, Lewis gives up only 5 puppets, whereas Geppetto must give up 4 puppets to produce the same amount of puzzles.
Regarding trade, they would benefit from trade if Geppetto trades his puppets for puzzles from Lewis in a range where Geppetto gives up fewer puzzles than he would have to produce himself, and Lewis gives up fewer puppets than he would have to produce himself. Thus, a beneficial range of trade might be "2 puzzles per puppet to 5 puzzles per puppet" because within this range, Geppetto gives up 2-5 puzzles which are less than the 20 puzzles he would sacrifice to produce a puppet himself. Similarly, Lewis would trade 2-5 puzzles which are less than the 10 puzzles he would have to give up to produce an extra puppet himself.