Suppose the country that produces shorts trades 18 million

Last updated: 4/24/2023

Suppose the country that produces shorts trades 18 million pairs of shorts to the other country in exchange for 54 million pounds of almonds 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 and enter each country s final consumption of each good on the line marked Consumption When the two countries did not specialize the total production of shorts was 23 million pairs per week and the total production of almonds was 68 million pounds per week Because of specialization the total production of shorts has increased by million pairs per week and the total production of almonds has increased by million pounds per week Because the two countries produce more shorts and more almonds 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 the table In the following table enter this difference in the boxes across the last row marked Increase in Consumption Without Trade Production Consumption With Trade Production Trade action Consumption Gains from Trade Shorts Millions of pairs 8 Yosemite 8 Almonds Millions of pounds 48 48 Shorts Millions of pairs 15 Everglades 15 Almonds Millions of pounds 20 20