Question

Both Mia and Mario produce only the item in which they have a comparative advantage. Then they trade one pasta for one pizza. Before specialization and trade​ started, Mia and Mario were each producing 66 dishes of pasta and 66 pizzas an hour. The total gains from trade are​ ______ dishes of pasta and​ ______ pizzas an hour.

Answer 1

The total gains from trade are​ 66 dishes of pasta and​ 66 pizzas an hour.

Step-by-step explanation:

A calculation of the net income from trade is the amount of the surplus of the customer and the earnings of the manufacturer or, more generally, the enhanced efficiency of the specialization of production with the subsequent export.

Trade gains can also apply to the net benefits of reducing barriers to trade, such as import tariffs, for a region.

To measure the income, take the price at which you sell the investment and deduct from it the price you originally charged for it. Now that you've got the income, split the income by the original value of the investment. Finally, subtract the response by 100 to adjust the percentage of your investment.