Referring to table 3, in GERMANY it takes four workers to produce 1,000 pairs of gloves, but it takes five Italian workers to do so and It takes one GERMAN worker to produce 1,000 Steamers, but it takes four Italian workers to do so.

Country

Number of Workers needed to produce 1,000 units Gloves

Number of Workers needed to produce 1,000 units Steamers

Germany

4 workers

1 worker

Italy

5 workers

4 workers

Table 1. Resources Needed to Produce Glovesand Refrigerators

Table

1. Complete table 4 if you consider a situation where Germany and Italy each have 40 workers.

Table4. Production Possibilities before Trade

Country

GlovesProduction using 40 workers

SteamersProduction using 40 workers

Germany

or

Italy

or

Table 5 provides each nation's production preferences.

Country

CurrentglovesProduction

CurrentsteamersProduction

Germany

5,000

20,000

Italy

4,000

5,000

Consider the situation where Germany exports 4,000 steamers to Italy in exchange for 1,800 pairs of gloves. (Terms of exchange for a straight line PPF).

2. Complete table 6, based on the nation's production preferences (table 3) and terms of exchange between the two countries.

Country

Gloves consumption after trade

Steamers consumption after trade

Germany

Italy

Table 6