Final answer:
Perry should specialize in producing poems, while Jordan should specialize in producing novels, as this will lead to higher total production and mutual benefits.
Step-by-step explanation:
In this scenario, Perry and Jordan are each producing the good in which they have a comparative advantage and trading at a price of 1 novel for 7 poems.
Perry's comparative advantage is in producing poems since he can produce them at a lower opportunity cost compared to novels, while Jordan's comparative advantage is in producing novels since he can produce them at a lower opportunity cost compared to poems.
By specializing in their respective areas of comparative advantage and trading, Perry and Jordan can achieve a higher level of total production and both parties can benefit from the trade.