The Social and Detail Division of Labor: My neighbors Ted and Janet consume prom dresses, and accounting services. Each can produce both at the following rate (output per day):
a. Draw production possibility frontiers for Ted and Jane producing the two goods (prom dresses and accounting) without trade. What is the relative price of accounting services and for prom dresses for each?
b. If Ted and Jane can trade services, in which will each specialize? Show how trade shifts the PPFs for each.
c. Who gains from trade?