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 4 dishes of pasta and 4 pizzas an hour each. What are the total gains from specialization and​ trade?

Answer 1

4, 4

Step-by-step explanation:

Now mia has comparative advantage in pasta production while Mario has advantage in pizza making

Before they both specialized, one was making 4 pizza and 4 pasta while the other made 4 pasta and 4 pizza.

Total pizza made = 8

Total pasta made = 8

After they specialized,

Maria makes 4 + 8 = 12 pizza

Mia makes 4+8 = 12 pizza

12-8= 4

So they both make 4 more pasta and 4 more pizza