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Suppose there exist two imaginary countries, Congaree and Yosemite. Their labor forces are each capable of suppiying four milison hours per day that can be

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Suppose there exist two imaginary countries, Congaree and Yosemite. Their labor forces are each capable of suppiying four milison hours per day that can be used to produce shorts, almonds, or some combination of the two. The following table stiows the amount of shorts or almonds that can be produced by one hour of labor: Suppose that initially Yosemite uses 1 milion hours of Iabor per day to produce shorts ard 3 million hours per day to produce aimonds, while Congaree uses 3 million fiours of labor per day to produce shorts and 1 million hours per day to produce almonds. As a result, Congaree produces 15 mallion pairs of shorts and 20 million pounds of almonds, and Yosemite produces 8 millon pairs of shorts and 48 miltion pounds of almonds. Assume there-are no other countries willing to engage in trade, so, in the absence of trade between these two countries, each country consumes the amount of shorts and almonds it produces. Congaree's opportunity cost of producing 1 pair of shorts is is of almonds. Therefore, of almonds, and Yosemite's opportunity cost of producing 1 pair of shorts has a comparative advantage in the production of shorts, and has a comparative advantage in the production of almonds. Suppose that each country completely specializes in the production of the good in which it has a comparative advantage, producing only that good. In this case, the country that produces shorts will produce million pounds per day. million pairs per day, and the country that produces almonds will produce In the following table, enter each country's production decision on the third row of the table (marked "Production"). Suppose the country that produces shorts trades 18 million pairs of shorts to the other country in exchange for 54 million pounds of almonds. In the following table, select the amount of each good that each country exports and imports in the boxes across the now marked "Irade Action, fand enter each country's final consumption of each good on the line marked "Consumption." When the two countries did not specialize, the total production of shorts was 23 million pairs per day, and the total production of almonds was 68 milion pounds per day, Because of specialization, the total production of shorts has increased by milion pairs per day, and the total production of almonds has increased by millien pounds per day. Because the two countries produce more shorts and more aimonds under specialization, each country is able to gain from tiade

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