3. Gains tram trade Consider two neighboring island countries called Arcadia and Euphoria. They each have 4 million labor hours available per month that they can use to produce rye, jeans, or a combination of both. The following table shows the amount of rye orjeans that can be produced using 1 hour of labor. Rye Jeans Country (Baskets per hour of labor) (Pairs per hour of labor) Arcad ia 12 24 Eu phoria 8 32 Initially, suppose Arcadia uses 1 million hours of labor per month to produce rye and 3 million hours per month to produce jeans, while Euphoria uses 3 million hours of labor per month to produce rye and 1 million hours per month to produce jeans. Consequently, Arcadia produces 12 million bushels of rye and 72 million pairs of jeans, and Euphoria produces 24 million bushels of rye and 32 million pairs of jeans. Assume there are no other countries willing to trade goods, so, in the absence of trade between these two countries, each country consumes the amount of rye and jeans it produces. Arcadia's opportunity cost of producing 1 bushel of rye is V of jeans, and Euphoria's opportunity cost of producing 1 bushel of rye is v of jeans. Therefore, V has a comparative advantage in the production of rye, and V has a comparative Arcadia's opportunity cost of producing l bushel of rye is v of jeans, and Euphoria's opportunity cost of producing l bushel of rye is v of jeans. Therefore, V has a comparative advantage in the production of rye, and V has a comparative advantage in the production of jeans. 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 rye will produce E million bushels per month, and the country that produces jeans will produce |:| million pairs per month. In the I'biiowing tahie, enter each country's production decision on the third row of the tabie ( marked "Production? Suppose the country that produces rye trades 26 million bushels of rye to the other country in exchange for F8 million pairs of jeans. In the foiiowing tahie, seiect the amount of each good that each couno'y exports and imports in the boxes across the row marked "Trade Action,\" and enter each country's nai consumption of each good on the line marked \"Cmsumption. " 1ii'iihen the two countries did not specialize, the total production of rye was 36 million bushels per month, and the total production of jeans was 104 million pairs per month. Because of specialization, the total production of rye has increased by E million bushels per month, and the total production ofjeans has increased by E million pairs per month. 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 rye will produce E million bushels per monthI and the country that produces jeans will produce E million pairs per month. In the following table, enter each country's production decision on the third row of the table (marked ".E'roduction fl. Suppose the country that produces rye trades 26 million bushels of rye to the other country in exchange for F8 million pairs of jeans. In the following table, select the amount of each good that each country exports and imports in the boxes across the row marlted "Trade Action,\" and enter each country's nal consumption of each good on the line marked "Consumption. ' when the two countn'es did not specialize, the total production of rye was 36 million bushels per month, and the total production of jeans was 104 million pairs per month. Because of specialization, the total production of rye has increased by E million bushels per month, and the total production of jeans has increased by \\:| million pairs per month. Because the two countries produce more rye and more jeans under specialization, each country is able to gain from trade. Calculate the gains from tradethat 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 dih'erence in the boxeslalcross h'reniastrow (marked "Increase in Consumption'l