England and Scotland both produce scones and sweaters. Suppose that an English worker can produce 60 scones per hour or 6 sweaters per hour. Suppose that a Scottish worker can produce 40 scones per hour or 8 sweaters per hour.

• Solve for Absolute Advantage, Comparative Advantage, specialization and trade
• In the absence of trade, assume England and Scotland divide their time equally between the two activities. Then, England and Scotland decide to trade with each other and specialize in the product in which they have comparative advantage. Give an example in which trade makes each country better off. Show the gains from trade. Explain with words + graphs.