In the following table, select the amount of each good that each country exports and imports in the boxes across the row marked "Trade Action," andenter each country's final consumption of each good on the line marked "Consumption."When the two countries did not specialize, the total production of jeans was 18 million pairs per week, and the total production of corn was 52 millionbushels per week. Because of specialization, the total production of jeans has increased bymillion pairs per week, and the total production ofcorn has increased bymillion bushels per week.Because the two countries produce more jeans and more corn under specialization, each country is able to gain from trade.Calculate the gains from trade-that is, the amount by which each country has increased its consumption of each good relative to the first row of thetable. In the following table, enter this difference in the boxes across the last row (marked "Increase in Consumption").BellissimaFelicidadCornJeansCornJeans(Millions of bushels)(Millions of pairs)(Millions of bushels)(Millions of pairs)Without Trade6361216Production6361216ConsumptionWith TradeProductionTrade actionConsumptionGains from TradeIncrease in Consumption 3. Gains from tradeConsider two neighboring island countries called Felicidad and Bellissima. They each have 4 million labor hours available per week that they can use toproduce jeans, corn, or a combination of both. The following table shows the amount of jeans or corn that can be produced using 1 hour of labor.JeansCornCountry(Pairs per hour of labor)(Bushels per hour of labor)Felicidad416Bellissima612

wo countries did not specialize, the total production of jeans was 18 million pairs per week, and the total production of corn was 52 r week. Because of specialization, the total production of jeans has increased by million pairs per week, and the total produc creased by million bushels per week. me two countries produce more jeans and more corn under specialization, each country is able to gain from trade. che gains from trade-that is, the amount by which each country has increased its consumption of each good relative to the first row he following table, enter this difference in the boxes across the last row (marked "Increase in Consumption"). Bellissima Felicidad Corn Jeans Corn Jeans (Millions of bushels) (Millions of pairs) (Millions of bushels) (Millions of pairs) E Trade 36 12 16 ction 16 6. 36 12 mption ade ction

wo countries did not specialize, the total production of jeans was 18 million pairs per week, and the total production of corn was 52 r week. Because of specialization, the total production of jeans has increased by million pairs per week, and the total produc creased by million bushels per week. me two countries produce more jeans and more corn under specialization, each country is able to gain from trade. che gains from trade-that is, the amount by which each country has increased its consumption of each good relative to the first row he following table, enter this difference in the boxes across the last row (marked "Increase in Consumption"). Bellissima Felicidad Corn Jeans Corn Jeans (Millions of bushels) (Millions of pairs) (Millions of bushels) (Millions of pairs) E Trade 36 12 16 ction 16 6. 36 12 mption ade ction

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter2: Choice In A World Of Scarcity

Section: Chapter Questions

Problem 10RQ: What is comparative advantage?

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What is comparative advantage?
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