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2. Gains from trade Consider two neighbouring Island countries called Dolorium and Contente. They each have 4 million labour hours available per week that they can use to produce Jeans, com, or a combination of both. The following table shows the amount of jeans or com that can be produced using one hour of Labour Country Dolorum Contente Jeans Corn (Pairs per hour of labour) (flushes per hour of labour) 16 6 12 Initially suppose Contents 1 million hours of labour per week to produce Jeans and milion hours per week to produce comt, while Dolorum uses million hours of labour per werk to produce Jeans and 1 million hours per week to produce com. Consequently, Dolorum produces 12 million pairs of jeans and 16 million bushels of com, and content produces million pairs of jeans and 16 million bushes of com. Asume there are now countries willing to trade goods, so in the absence of trade between these two countries, ach country consumes the amount of jeans and commit produces Dolors oportunity cost of producing all of jeans is of com, and contentos oportunity cost of producing I pair ofan of com. Therefore, has a comparative advantage in producing Jeans, and has a comparative advantage in producing com. Suppose that each country completely soos in producing the good in which it has comparative advantage, producing only that good. In this case, the country that produces Jeans will produce million pairs per week, and the country that produdes com wil braduce million bushes per week countries willing to trade goods, so, in the absence of trade between these two countries, each country consumes the amount of jeans and corn it produces Dolorium's opportunity cost of producing 1 pair of jeans is of corn, and Contente's opportunity cost of producing 1 pair of Jeans is of corn. Therefore, has a comparative advantage in producing Jeans, and has a comparative advantage in producing com Suppose that each country completely specializes in producing the good in which it has a comparative advantago, producing only that good. In this case, the country that produces jeans will product million pairs per week, and the country that produces corn will produce million bushels per week. in the following table, enter each country's production decision in the third row of the table (marked "Production"). Suppone the country that produces jeans trades 14 milion pairs of jeans to the other country in exchange for 42 million bushels of corn, In the following table, select the amount of each good that each country experts and imports in the boxes across the row marked Trade Action, and enter each country's final consumation of each good on the line marked "Consumption When the two countries did not specialize the total production of fans was 10 million pairs per week, and the total production of corn was 52 millon bushels per week. Because of specialization, the total production of deans has increased by million pas per week, and the total production of corn has increased by million bushels per week Because the two countries produce more Jeans and more com under specialization cach country is able to gain from trade, Calculate the game from trade-thut it, the amount by which each country has increased comb of good reative to the first row of the table. In the footab enter the difference in the cores across the last row marked as a consumption anter each country's four consumption of each voed on the line marked "Commotion When the two countries did not specialize, the total production of an was 11 million pairs per week, and the total production of com as 52 milion bushes per week. Because of specialization, the total production of jeans has increased by milion pas per week, and the total production of con la incred milion bushels per Because the two countries produce more fans and more com under station, auch visto care trade Calcette gars from trade-that the amount by which coursed its consumendach pod to the first of the table in the water to the toward consumo Delo Contante Sans Com JORS Com (Millionair) (wifi) of bushels) 12 12 30 without Trade Production Consumption with Trade Production Trade Act Compte Gains from Tradu Increase in Costa . 2. Gains from trade Consider two neighbouring Island countries called Dolorium and Contente. They each have 4 million labour hours available per week that they can use to produce Jeans, com, or a combination of both. The following table shows the amount of jeans or com that can be produced using one hour of Labour Country Dolorum Contente Jeans Corn (Pairs per hour of labour) (flushes per hour of labour) 16 6 12 Initially suppose Contents 1 million hours of labour per week to produce Jeans and milion hours per week to produce comt, while Dolorum uses million hours of labour per werk to produce Jeans and 1 million hours per week to produce com. Consequently, Dolorum produces 12 million pairs of jeans and 16 million bushels of com, and content produces million pairs of jeans and 16 million bushes of com. Asume there are now countries willing to trade goods, so in the absence of trade between these two countries, ach country consumes the amount of jeans and commit produces Dolors oportunity cost of producing all of jeans is of com, and contentos oportunity cost of producing I pair ofan of com. Therefore, has a comparative advantage in producing Jeans, and has a comparative advantage in producing com. Suppose that each country completely soos in producing the good in which it has comparative advantage, producing only that good. In this case, the country that produces Jeans will produce million pairs per week, and the country that produdes com wil braduce million bushes per week countries willing to trade goods, so, in the absence of trade between these two countries, each country consumes the amount of jeans and corn it produces Dolorium's opportunity cost of producing 1 pair of jeans is of corn, and Contente's opportunity cost of producing 1 pair of Jeans is of corn. Therefore, has a comparative advantage in producing Jeans, and has a comparative advantage in producing com Suppose that each country completely specializes in producing the good in which it has a comparative advantago, producing only that good. In this case, the country that produces jeans will product million pairs per week, and the country that produces corn will produce million bushels per week. in the following table, enter each country's production decision in the third row of the table (marked "Production"). Suppone the country that produces jeans trades 14 milion pairs of jeans to the other country in exchange for 42 million bushels of corn, In the following table, select the amount of each good that each country experts and imports in the boxes across the row marked Trade Action, and enter each country's final consumation of each good on the line marked "Consumption When the two countries did not specialize the total production of fans was 10 million pairs per week, and the total production of corn was 52 millon bushels per week. Because of specialization, the total production of deans has increased by million pas per week, and the total production of corn has increased by million bushels per week Because the two countries produce more Jeans and more com under specialization cach country is able to gain from trade, Calculate the game from trade-thut it, the amount by which each country has increased comb of good reative to the first row of the table. In the footab enter the difference in the cores across the last row marked as a consumption anter each country's four consumption of each voed on the line marked "Commotion When the two countries did not specialize, the total production of an was 11 million pairs per week, and the total production of com as 52 milion bushes per week. Because of specialization, the total production of jeans has increased by milion pas per week, and the total production of con la incred milion bushels per Because the two countries produce more fans and more com under station, auch visto care trade Calcette gars from trade-that the amount by which coursed its consumendach pod to the first of the table in the water to the toward consumo Delo Contante Sans Com JORS Com (Millionair) (wifi) of bushels) 12 12 30 without Trade Production Consumption with Trade Production Trade Act Compte Gains from Tradu Increase in Costa