Q1. The following are production possibilities tables for China and US. Assume that before specialization and trade the optimal product mix for China is alternative B and for US is alternative U.

China's Production Possibilities

Product

A

B

C

D

E

F

Apparels (in thousands)

30

24

18

12

6

0

Chemicals (in tons)

0

6

12

18

24

30

US Production Possibilities

Product

R

S

T

U

V

W

Apparels (in thousands)

10

8

6

4

2

0

Chemicals (in tons)

0

4

8

12

16

20

a.What product should each country produce? Show your working.

d.Suppose that 4 units of apparels are exchanged for 6 units of chemicals. Draw a table showing the gains from specialization and trade for each nation?