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GAINS FROM TRADE Per worker output for U.S. and China: Cars Phones United States 2 28 China 4 4 Suppose each country has 2,000 workers

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GAINS FROM TRADE Per worker output for U.S. and China: Cars Phones United States 2 28 China 4 4 Suppose each country has 2,000 workers and at autarky, they are both using 1000 workers each for cars and phones. They now decide to trade with one another and the terms of trade is 2,000 cars for every 14,000 phones. Based on these information, fill in the following table. Production before trade: Consumption before trade: Cars Phones Cars Phones United States United States China China Production after trade: Consumption after trade: Cars Phones Cars Phones United States United States China China DR. DHAKAL 1

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