Production possibilities data for Gamma and Sigma.All data are in tons.Gamma production possibilities: Sigma production possibilities:
On the basis of the above information:

Question

Production possibilities data for Gamma and Sigma.All data are in tons.Gamma production possibilities:  Sigma production possibilities:
 On the basis of the above information:

Quizplus · Accepted Answer

Gamma has a comparative advantage in tea production since it can produce more tea compared to pots, while Sigma has a comparative advantage in pots production. Therefore, Gamma should specialize in tea production and export tea to Sigma, while Sigma should specialize in pots production and export pots to Gamma. This will result in both nations being able to consume more tea and pots, leading to an increase in overall welfare.

Production Possibilities Data for Gamma and Sigma