Final answer:
Country B has an absolute advantage in producing computers, while Country A has a comparative advantage in producing cars. The opportunity cost of one car in Country B is 2 computers. Country A should import computers as it is more cost-effective than domestic production given the trade terms.
Step-by-step explanation:
To determine which country has an absolute advantage in producing computers, we compare the outputs of Country A and Country B using equal amounts of resources. Country B can produce 9 cars or 18 computers, while Country A can produce 9 cars or 12 computers. Country B has the absolute advantage in producing computers because it can produce more computers with the same amount of resources.
The opportunity cost of producing one car in Country B is the amount of computers that could have been produced instead. If Country B can produce 9 cars or 18 computers with the same resources, producing one car costs 18/9 = 2 computers. Therefore, the opportunity cost of a car in terms of computers in Country B is 2 computers.
For comparative advantage, we look at the opportunity costs. Country A's opportunity cost of producing one car is 12/9 = 1.33 computers, while Country B's is 2 computers. Since 1.33 is less than 2, Country A has the comparative advantage in producing cars because it gives up fewer computers to produce one more car.
If the terms of trade are that 3 cars are exchanged for 1 computer, Country A should import computers. Country A's opportunity cost of producing one computer is 9/12 cars or 0.75 cars for one computer. Since they can get a computer from Country B for only 0.33 cars (1/3 of a car, the equivalent of trading 3 cars for 1 computer), it's more cost-effective for Country A to import computers rather than produce them domestically.