Question: (a) On the graphs of Problem 3, show, for each nation with trade, the direction (by an arrow on the production frontier) of specialization in
(a) On the graphs of Problem 3, show, for each nation with trade, the direction (by an arrow on the production frontier) of specialization in production and the equilibrium point of production and consumption.
(b) How much does each nation gain in consumption compared with its autarky point? Which of the two nations gains more from trade? Why?
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