Consider the apple–computer trade example given in Section 19.5. Now suppose that because of a new technology, the North becomes even more productive at producing computers: one unit of labor can now produce 20 computers instead of 16.
(a) Autarky: Redo Table 19.3 to reflect this change. Assume the other parameter values are unchanged.
(b) Free trade: Do the same thing for Table 19.4.
(c) Discuss the differences: How do the gains from trade change? Who benefits from the improvement in technology in the North?