Shows the productivity for the countries Pin and Pang.
Machines Bread
Pin 4 or 3
Pang 3 or 8
1) If the working population of Pin and Pang are both 6 million, divided equally between the two industries in each country, how many machines and bread are currently being produced in Pin and Pang?
2) if the two countries decide to specialize, in which product does each country have a comparative advantage?
3) if the two countries were to totally specialize, what would be the resulting combined totals?
4) what are the gains from trade?