• Imagine that two countries, Richland and Poorland, can produce just two goods, computers and coal. Assume that for a given amount of land and capital, the output of these two products requires the constant amounts of labour shown in Table 1. Assume that each country has 20 million workers, the autarky scenarios are such that Richland would produce Answer million and , Answer of 100 tonnes of coal if all the resources were dedicated to producing each of the goods and Poorland would produce Answer million and , Answer of 100 tonnes of coal if all the resources were dedicated to producing each of the goods. Given the input requirements in Table 1 Richland has absolute advantage in production of Answer and Answer . As such Poorland would Answer be able trade with Richland because it has Answer in both goods. Consequently Richland is a Answer country while poorland is a Answer county. The statistics in Table 1 mean that producing a computer in Richland implies giving up Answer of 100 tonnes of coal while producing 100 tonnes of coal imply giving up Answer computers. Similarly, in Poorland the statistics in Table 1 mean that producing a computer implies giving up Answer of 100 tonnes of coal while producing 100 tonnes of coal imply giving up Answer computers. Therefore, Richland has comparative advantage in producing Answer while Poorland has comparative advantage in producing Answer . The country that concentrates on producing computers sells 6 million computers domestically, this means that this country exports Answer million computers. If the exchange ratio is 1 computer=0.7 100 tonnes of coal. The country selling computers imports Answer 100 tonnes of coal from the country concentrating on coal. The country concentrating on coal will sell Answer 100 tonnes of coal locally. This overall trade means that Poorlands gains from international trade are Answer units.