So the total world production of computers is 13 computers, and total world production of shirts is 18 shirts. Shirts, we now have 12 shirts, 24 units of labor, two units of labor per shirts, so you get 12 shirts in total. We have more computers with specialization than we did when the two countries were not specialized and did not trade. And the United States has fewer shirts than they did before. Now suppose that the United States trades one computer to get three shirts.
Make sure you’ve completed the homework introduced in the Comparative Advantage video before you watch this video, as we’ll be going over the answer.
We take a look at our example which compares shirt and computer production and consumption in Mexico and the United States.
There are many sources where you can find helpful information about microeconomics, but it is often explained in a easy way, so that you can understand it and get the point.
The definitions and content are summarized, and you will be able to do your homework with that.