Macroeconomics + Economy 2009 Update 18th Edition by Campbell McConnell, Sean Masaki Flynn,Stanley Brue

Exercise 6

Suppose nation A can produce 80 units of X by using all its resources to produce X or 60 units of Y by devoting all its resources to Y. Comparable figures for nation B are 60 units of X and 60 units of Y. Assuming constant costs, in which product should each nation specialize Why What are the limits of the terms of trade