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Assume that China and France each have 1,000 production units. With one production, China can produce either 10 containers of toys or 7 cases of

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Assume that China and France each have 1,000 production units. With one production, China can produce either 10 containers of toys or 7 cases of wine, France can produce either 2 containers of toys or 7 cases of wine. Assume complete specialization where China produces 10000 containers of toys and France produces 7000 cases of wine. Both countries agree to trade at France's domestic price where 2 containers of toys equals 7 cases of wine. Assume China exports 400 containers of toys to France, In return of 400 containers of toys France importa from Chine, France exports cases of wine. At the end, China consumes containers of toys and cases of wine At the end, France consumon containers of toys and cases of wine Compared to no trade case, where China consumou 9000 containers of toys and 1400 cases of wine and France consumes 400 containers of toys and 5800 cases of wine, China is better off because they consume more toys. O True False

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