Answer the question on the basis of the following information.Assume that by devoting all its resources to the production of X,nation Alpha can produce 40 units of X.By devoting all its resources to Y,Alpha can produce 60Y.Comparable figures for nation Beta are 60X and 40Y.
Refer to the given information.If Alpha had produced 20X and 30Y and Beta had produced 30X and 20Y before specialization and trade,then we can say that the gains from specialization and trade are 10X and 10Y.

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Quizplus · Accepted Answer

Before specialization and trade, Alpha could produce 20X and 30Y, which is a total of 50 units. Similarly, Beta could produce 30X and 20Y, which is also a total of 50 units. 
If they specialize according to their comparative advantage, Alpha will produce only X and Beta will produce only Y. 
After specialization and trade, Alpha will produce 40X and Beta will produce 40Y. Together, they can trade 10X for 10Y, which will result in both countries having 30X and 30Y. 
Thus, the gains from specialization and trade are 10X and 10Y.

Answer the Question on the Basis of the Following Information