Question: (a) Continuing with the numerical example in Question 6, now assume that the United States has 600 hours of labor available to it and that,

(a) Continuing with the numerical example in Question 6, now assume that the United States has 600 hours of labor available to it and that, prior to trade, it is using 330 of those hours for producing wheat and the remaining 270 hours for producing clothing. How much wheat and how much clothing will the United States be producing (and therefore consuming) in this pretrade situation?
(b) Assume that trade between the United Kingdom and the United States takes place as in Question 7(b). With trade the United States devotes all of its labor hours to wheat production and obtains 200 units of wheat. Consistent with the United Kingdom’s trade in Question 7(b), the United States then exports 80W and imports 40C. What will be the United States consumption of wheat and clothing in the trading situation? By how much has the United States, because of trade, been able to increase its consumption of wheat and its consumption of clothing? Looking at your answers to this question and to Question 7(b), can you conclude that trade is indeed a positive sum game? Why or why not?

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