If with one unit of labor the U.S. can produce 20 units of computer software and 10 units of computer hardware and China can produce 6 units of software and 4 units of hardware then trade can make

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Quizplus · Accepted Answer

By specializing in the production of the good in which it has a comparative advantage, each country can increase its overall production and consumption possibilities. In this case, the US has a comparative advantage in producing computer software (producing 20 units with one unit of labor as compared to China's production of 6 units with one unit of labor), while China has a comparative advantage in producing computer hardware (producing 4 units with one unit of labor as compared to the US's production of 10 units with one unit of labor). By trading, the US can export software to China and import hardware from China, both at a lower opportunity cost than producing these goods domestically, making both countries better off.

If with One Unit of Labor the U