Canada: vegetable : 5 units , Fish : 35 units

US: vegetables : 8 unit, Fish : 40 units

Terms of Trade: 1 V : 6 F(The terms of trade dene the rate at which the two goods will trade post-specialization. Let us suppose that a bargaining process leads to agreement that one unit of Vegetable will trade for six units of Fish. Such a trading rate, one that lies between the opportunity costs of each economy, benets both economies)

(a) Draw PPFs of both countries

(b) Draw Consumption Possibility Frontier of two countries

(c) Show the gain from trade