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Assume that the standard assumptions of the Ricardian model hold. Suppose that the following Table shows the output in terms of units of wine (W)

Assume that the standard assumptions of the Ricardian model hold. Suppose that the following Table shows the output in terms of units of wine (W) and cheese (C) that is produced when 1 unit of labour is employed in France and in Italy: France Italy W 20 1 C 60 3 Under free trade, which goods are produced by which countries? Do both countries gain from free trade? Explain why or why not using any relevant diagrams.

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