Question

Mia and Mario specialize in producing the item in which she or he has a comparative advantage. Then they trade one pasta dish for one pizza.. Before specialization and​ trade, Mia and Mario produce 6 dishes of pasta and 6 pizzas an hour each. The total gains from specialization and trade are​ ___________

Answer 1

6 pizza, 6 pasta

Explanation:

Now from the question we can see that Mia has comparative advantage in Pasta production and Mario in Pizza production.

Now before they both specialized, Mia's production was 6 pizza, 6 pasta. Mario also was making 6 pasta, 6 pizza.

So in total both were making 12 pizza and 12 pasta.

After they had specialized, Mario's pizza production is 18 pizza and Mia's pasta production is 18 pasta.

So we have that mia is producing 6 more pizza, 18-12 = 6

and Mario is also producing 6 more pasta.

So there is net gain of 6 pizza and 6 pasta.

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