This table shows how much wine and cheese can be produced in Spain and Portugal with one unit of equivalent resources.Initially there is no trade.Once trade opens up,transportation costs are assumed to be zero.
TABLE 32-5
-Refer to Table 32-5.Once Spain and Portugal begin to trade cheese and wine,

Question

This table shows how much wine and cheese can be produced in Spain and Portugal with one unit of equivalent resources.Initially there is no trade.Once trade opens up,transportation costs are assumed to be zero.
  TABLE 32-5
-Refer to Table 32-5.Once Spain and Portugal begin to trade cheese and wine,

Quizplus · Accepted Answer

With trade, both countries can specialize in producing the good for which they have a comparative advantage, leading to a decrease in the opportunity cost of the goods they now import. For example, Portugal can specialize in producing wine and export it to Spain, while Spain can specialize in producing cheese and export it to Portugal. This will result in a decrease in the opportunity cost of cheese for Portugal and wine for Spain. Therefore, it is beneficial for both countries to engage in trade, and there will be no permanently unemployed resources in Portugal or a need for either country to ban the import of the other's product.

This Table Shows How Much Wine and Cheese Can Be