e welcomeand-rules x I 0 Fiverr/Search Result X I Content x I Ii Mail-Aloraini, Sarah x I E? Hide My HistarylSee X {:0 MindTap-CengageL x u Course Hero (- 9 C i ngcengagecom/staticblui/evo/index.html?deployment[d=56736621655179211441250168&eISBN=9781337096577&id=1196495307&snapshotld=2428636& Apps M Gmail 0 YouTube 7) Maps [I Mail-Aloraini,Sar... Homework (Ch 03) 3. Gains from trade Consider two neighboring island countries called Dolorium and Bellissima. They each have 4 million labor hours available per month that they can use to produce corn, jeans, or a combination of both. The following table shows the amount of corn or jeans that can be produced using 1 hour of labor. Corn Jeans Country (Bushels per hour of labor) (Pairs per hour of labor) Dolorium 5 20 Bellissima 8 16 Initially, suppose Bellissima uses 1 million hours of labor per month to produce corn and 3 million hours per month to produce jeans, while Dolorium uses 3 million hours of labor per month to produce corn and 1 million hours per month to produce jeans. Consequently, Dolorium produces 15 million bushels of corn and 20 million pairs of jeans, and Bellissima produces 8 million bushels of corn and 48 million pairs of jeans. Assume there are no other countries willing to trade goods, 50, in the absence of trade between these two countries, each country consumes the amount of corn and jeans it produces. Dolorium's opportunity cost of producing 1 bushel of corn is V of jeans, and Bellissima's opportunity cost of producing 1 bushel of corn is v of jeans. Therefore, V has a comparative advantage in the production of corn, 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 corn will produce million bushels per month, and the country that produces jeans will produce million pairs per month. X|+ 0 yr: :02 Reading List 0X e welcomeand-rules x I 0 Fiverr/Searoh Result X I Content x I Ii Mail-Aloraini, Sarah x I E? Hide My HistorylSee X {:0 MindTap-CengageL x u Course Hero X I + o