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The following table describes the production possibilities of two cities in the countryr of Baseballia: Pairs of Red Socks per Worker per Hour Pairs of
The following table describes the production possibilities of two cities in the countryr of Baseballia: Pairs of Red Socks per Worker per Hour Pairs of White Socks per Worker per Hour Boston 3 3 Chicago 2 1 Without trader the price of a pair of white socks (in terms of red socks) in Boston is V of red socksI and in Chicago it is V of red socks. v has an absolute advantage in the production of red socksr and V has an absolute advantage in the production of white socks. v has a comparative advantage in the production of red socksI and V has a comparative advantage in the production of white socks. If the cities trade with each other, Boston will export V socksr and Chicago will export V socks. The price of white socks can be expressed in terms of red socks. The highest price at which white socks can be traded that would make both cities better off is V of red socl-cs per pair of white socks, and the lowest price that makes both cities better off is V of red socks per pair of white socks
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