Here’s another specialization and exchange problem. This problem is wholly made-up, so that you won’t be able to use your intuition about the names of countries or the products to figure out the answer.
Consider the following productivity table:
Number of Hours to Make One Rotid Number of Hours to Make One Tauron
Mandovia 50 100
Ducennia 150 200
d. Now allow specialization. If each country completely specializes in the product in which it holds the comparative advantage, what will the total output of rotids be? Of taurons? Is the total output of each product higher than before?
