6. You and your neighbor are the only people in a world that produces only cashews...
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6. You and your neighbor are the only people in a world that produces only cashews and mushrooms. You do not engage in trade with each other. On your own, you can each produce the following per day: You Neighbor Cashews 12 pounds O pounds Mushrooms O pounds 6 pounds Cashews Mushrooms Only gather cashews Only gather mushrooms 4 pounds O pounds O pounds 4 pounds Right now you each split your time between gathering each product. You currently gather and consume eight pounds of cashews and two pounds of mushrooms, while your neighbor is gathering and consuming three pounds of cashews and one pound of mushrooms. Show (both graphically and numerically) how specialization and then trade with each other can make both of you better off. Who specializes in the production of each product? 6. You and your neighbor are the only people in a world that produces only cashews and mushrooms. You do not engage in trade with each other. On your own, you can each produce the following per day: You Neighbor Cashews 12 pounds O pounds Mushrooms O pounds 6 pounds Cashews Mushrooms Only gather cashews Only gather mushrooms 4 pounds O pounds O pounds 4 pounds Right now you each split your time between gathering each product. You currently gather and consume eight pounds of cashews and two pounds of mushrooms, while your neighbor is gathering and consuming three pounds of cashews and one pound of mushrooms. Show (both graphically and numerically) how specialization and then trade with each other can make both of you better off. Who specializes in the production of each product?
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