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Initially, neither of the two economies is specializing in the production of one of the two goods, nor are the two economies trading with each
Initially, neither of the two economies is specializing in the production of one of the two goods, nor are the two economies trading with each other. In the no-specialization-no-trade (NS-NT) scenario, Arcardia produces and consumes 192 units of good X and 240 units of good Y (combination B), and Euphoria produces and consumes 180 units of good X and 240 units of good Y (combination C). Now suppose that each economy decides to completely specializes in the production of the good in which it has a comparative advantage, producing only that good. In this case, the economy that produces good X will produce units of good X, and the economy that produces good Y will produce units of good Y. Suppose the economy that produces good X trades 320 units of good X to the other economy in exchange for 320 units of good Y
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