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No 3. Work through the diagrams where there are two people and two possible goods that they can make with their labor, as follows: Tina
No 3. Work through the diagrams where there are two people and two possible goods that they can make with their labor, as follows: Tina can produce 100X and 0Y;50X and 25Y; or 0X and 50Y. David can produce 50X and 0Y;25X and 40Y; or 0X and 80Y. Start at a point where Tina is at 50X and 25Y and David is at 25X and 40Y. Who has the absolute advantage in Product X? How about Product Y? Who has the comparative advantage in Product X? How about Product Y? Let's say that they each are devoting 50% of their productive energies to each product and then meet to discuss trading. How much is each making, and how might they try to benefit from their comparative advantages
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