Suppose that the two nations in Problem 32-4 decide to specialize in producing the good for which they have a comparative advantage and to engage in trade. Will residents of both nations agree to trade wine for digital TVs at a rate of exchange of 4 bottles of wine for 1 digital TV?

Why or why not?

To answer Problems 32-7 and 32-8, refer to the following table, which shows possible combinations of hourly outputs of modems and flash memory drives in South Shore and neighboring East Isle, in which opportunity costs of producing both products are constant.

South Shore East Isle Modems Flash Drives Modems 75 0 100 Flash Drives 0 60 30 80 10 45 60 60 30 90 40 15 120 20 0 150 0 23480 50