Attempts Keep the Highest / 4 3. Gains from trade Suppose there exist two imaginary countries, Congaree and Glacier. Their labor forces are each capable of supplying four million hours per that can be used to produce shorts, almonds, or some combination of the two. The following table shows the amount of shorts or almonds that can produced by one hour of labor. Suppose that initially Glacier uses 1 million hours of labor per day to produce shorts and 3 million hours per day to produce almonds, while Congaree uses 3 million hours of labor per day to produce shorts and 1 million hours per day to produce almonds. As a result, Congaree produces 24 million pairs of shorts and 32 million pounds of almonds, and Glacier produces 12 million pairs of shorts and 72 million pounds of almonds. Assume there are no other countries willing to engage in trade, so, in the absence of trade between these two countries, each country consumes the amount of shorts and almonds it produces. Congaree's opportunity cost of producing 1 pair of shorts is of almonds, and Glacier's opportunity cost of producing 1 pair of shorts is of almonds. Therefore, has a comparative advantage in the production of shorts, and has a comparative advantage in the production of almonds. Suppose that each country completely specializes in the production of the good in which it has a comparative advantage, producing only that good. In this case, the country that produces shorts will produce million pairs per day, and the country that produces almonds will produce million pounds per day. In the following table, enter each country's production decision on the third row of the table (marked "Production"). Suppose the country that produces shorts trades 26 million pairs of shorts to the other country in exchange for 78 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 36 million pairs per day, and the total production of almonds was 104 million pounds per day. Because of specialization, the total production of shorts has increased by production of almonds has increased by moundion per 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"). 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 .

1. Attempts Keep the Highest / 4 3. Gains from trade Suppose there exist two imaginary countries,
Congaree and Glacier. Their labor forces are each capable of supplying four million hours per
that can be used to produce shorts, almonds, or some combination of the two. The following
table shows the amount of shorts or almonds that can produced by one hour of labor. Suppose
that initially Glacier uses 1 million hours of labor per day to produce shorts and 3 million hours
per day to produce almonds, while Congaree uses 3 million hours of labor per day to produce
shorts and 1 million hours per day to produce almonds. As a result, Congaree produces 24
million pairs of shorts and 32 million pounds of almonds, and Glacier produces 12 million pairs
of shorts and 72 million pounds of almonds. Assume there are no other countries willing to
engage in trade, so, in the absence of trade between these two countries, each country consumes
the amount of shorts and almonds it produces. Congaree's opportunity cost of producing 1 pair of
shorts is of almonds, and Glacier's opportunity cost of producing 1 pair of shorts is of almonds.
Therefore, has a comparative advantage in the production of shorts, and has a comparative
advantage in the production of almonds. Suppose that each country completely specializes in the
production of the good in which it has a comparative advantage, producing only that good. In
this case, the country that produces shorts will produce million pairs per day, and the country that
produces almonds will produce million pounds per day. In the following table, enter each
country's production decision on the third row of the table (marked "Production"). Suppose the
country that produces shorts trades 26 million pairs of shorts to the other country in exchange for
78 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 36 million pairs per day, and the
total production of almonds was 104 million pounds per day. Because of specialization, the total
production of shorts has increased by production of almonds has increased by moundion per
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"). 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 the first row
of table. In the following table, enter this difference in the boxes across the last row (marked
"Increase in Consumption").