Suppose there exist two imaginary countries, Denali and Congaree. Their labor forces are each capable of supplying four million hours per week that can be used to produce chinos, pistachios, or some combination of the two. The following table shows the amount of chinos or pistachios that can be produced by one hour of labor.

Country	Chinos	Pistachios
(Pairs per hour of labor)	(Pounds per hour of labor)
Denali	12	24
Congaree	8	32

Suppose that initially Denali uses 1 million hours of labor per week to produce chinos and 3 million hours per week to produce pistachios, while Congaree uses 3 million hours of labor per week to produce chinos and 1 million hours per week to produce pistachios. As a result, Denali produces 12 million pairs of chinos and 72 million pounds of pistachios, and Congaree produces 24 million pairs of chinos and 32 million pounds of pistachios. 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 chinos and pistachios it produces.

Denali's opportunity cost of producing 1 pair of chinos is1/2 pound of pistachios, and Congaree's opportunity cost of producing 1 pair of chinos is1/4 pound of pistachios. Therefore,Denali has a comparative advantage in the production of chinos, andCongaree has a comparative advantage in the production of pistachios.

Suppose that each country completely specializes in the production of the good in which it has a comparative advantage, producingonlythat good. In this case, the country that produces chinos will produce

millionpairs per week, and the country that produces pistachios will produce

millionpounds per week.

In the following table, enter each country's production decision on the third row of the table (marked "Production").Suppose the country that produces chinos trades 26 million pairs of chinos to the other country in exchange for 78 million pounds of pistachios.In the following table, select the amount of each good that each country exports and imports in the boxes across the row marked "Trade Action," and 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 chinos was 36 million pairs per week, and the total production of pistachios was 104 million pounds per week. Because of specialization, the total production of chinos has increased by

millionpairs per week, and the total production of pistachios has increased by

millionpounds per week.

Because the two countries produce more chinos and more pistachios under specialization, each country is able to gain from trade.

Calculate the gains from tradethat is, the amount by which each country has increased its consumption of each good relative to the first row of the table. In the following table, enter this difference in the boxes across the last row (marked "Increase in Consumption"

	Denali	Congaree
Chinos	Pistachios	Chinos	Pistachios
(Millions of pairs)	(Millions of pounds)	(Millions of pairs)	(Millions of pounds)
Without Trade
Production	12	72	24	32
Consumption	12	72	24	32
With Trade
Production
Trade action
Consumption
Gains from Trade
Increase in Consumption