Suppose that Laurence faces the following opportunity costs: 0 The opportunity cost of producing 1 unit of cell phones is 10 units of cell phone cases. 0 The opportunity cost of producing 1 unit of cell phone cases is 0.1 units of cell phones. Suppose that Dafydd faces the following opportunity costs: 0 The opportunity cost of producing 1 unit of cell phones is 0.25 units of cell phone cases. 0 The opportunity cost of producing 1 unit of cell phone cases is 4 units of cell phones. Suppose that the terms of trade are such that 1 unit of cell phones trades for 0.57 units of cell phone cases. Because Dafydd has the lower opportunity cost of producing cell phones, they will specialize in the production of cell phones and trade with Laurence to get cell phone cases. Because Laurence has the lower opportunity cost of producing cell phone cases, they will specialize in the production of cell phone cases and trade with Dafydd to get cell phones. Both parties will benefit from this trade. We can see this by noting the following: 1. Consider Dafydd with and without specialization and trade. Recall that they will specialize in the production of cell phones with specialization and trade. 0 Without specialization and trade, Dafydd must give u ~/ (select) unit(s) of cell phones in order to gain 1 unit of cell phone cases. 0 With specialization and trade, Dafydd can produce 1 hones and trade it for 0.57 units of cell phone cases, so they must give up only (select) unit(s) o . in order to gain 1 unit of cell phone cases. In this case, 1 unit of cell phone cases costs them fewer Dafydd is better off with specialization and trade. hones with trade than without trade. Therefore, Suppose that Laurence faces the following opportunity costs: 0 The opportunity cost of producing 1 unit of cell phones is 10 units of cell phone cases. 0 The opportunity cost of producing 1 unit of cell phone cases is 0.1 units of cell phones. Suppose that Dafydd faces the following opportunity costs: 0 The opportunity cost of producing 1 unit of cell phones is 0.25 units of cell phone cases. 0 The opportunity cost of producing 1 unit of cell phone cases is 4 units of cell phones. Suppose that the terms of trade are such that 1 unit of cell phones trades for 0.57 units of cell phone cases. Because Dafydd has the lower opportunity cost of producing cell phones, they will specialize in the production of cell phones and trade with Laurence to get cell phone cases. Because Laurence has the lower opportunity cost of producing cell phone cases, they will specialize in the production of cell phone cases and trade with Dafydd to get cell phones. Both parties will benefit from this trade. We can see this by noting the following: 1. Consider Dafydd with and without specialization and trade. Recall that they will specialize in the production of cell phones with specialization and trade. 0 Without specialization and trade, Dafydd must give up (select) unit(s) of cell phones in order to gain 1 unit of cell phone cases. 0 With specialization and trade, Dafydd can produce 1 unit of cell phones and trade it for 0.57 units of cell phone cases, so they must give up onl (select) unit(s) of cell phones in order to gain 1 unit of cell phone cases. In this case, 1 unit of cell phone cas Dafydd is better off with specializat fewer units of cell phones with trade than without trade. Therefore, In this case, 1 unit of cell phone cases costs them fewer units of cell phones with trade than without trade. Therefore, Dafydd is better off with specialization and trade. 2. Consider Laurence with and without specialization and trade. Recall that they will specialize in the production of cell phone cases with specialization and trade. 0 Without specialization and trade, Laurence must give u J (select) unit(s) of cell phone cases in order to gain 1 unit of cell phones. one cases and trade it for 1.75 units of cell ases in order to gain 1 unit of cell phones. 0 With specialization and trade, Laurence can produce 1 phones, so they must give up only (select) unit(s) o In this case, 1 unit of cell phones costs them fewer units of Laurence is better off with specialization and trade. ses with trade than without trade. Therefore, In this case, 1 unit of cell phone cases costs them fewer units of cell phones with trade than without trade. Therefore, Dafydd is better off with specialization and trade. 2. Consider Laurence with and without specialization and trade. Recall that they will specialize in the production of cell phone cases with specialization and trade. 0 Without specialization and trade, Laurence must give up (select) unit(s) of cell phone cases in order to gain 1 unit of cell phones. 0 With specialization and trade, Laurence can produce 1 unit of cell phone cases and trade it for 1.75 units of cell phones, so they must give up on J (select) unit(s) of cell phone cases in order to gain 1 unit of cell phones. In this case, 1 unit of cell phones cos r units of cell phone cases with trade than without trade. Therefore, Laurence is better off with specializal e