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$3.$ Comparative advantage and gains from trade

Consider two neighboring island countries called Euphoria and Bellissima. They each have $4$ million labor hours available per month that they can use to produce corn, jeans, or a combination of both. The following table shows the amount of corn or jeans that can be produced using $1$ hour of labor.

$\backslash$table$[[,$Corn,Jeans$],[$Country$,($Bushels per hour of labor$),($Pairs per hour of labor$)],[$Euphoria$,4,16],[$Bellissima$,6,12]]$

Initially, suppose Bellissima uses $1$ million hours of labor per month to produce corn and $3$ million hours per month to produce jeans, while Euphoria uses $3$ million hours of labor per month to produce corn and $1$ million hours per month to produce jeans. Consequently, Euphoria produces $12$ million bushels of corn and $16$ million pairs of jeans, and Bellissima produces $6$ million bushels of corn and $36$ million pairs of jeans. Assume there are no other countries willing to trade goods, so in the absence of trade between these two countries, each country consumes the amount of corn and jeans it produces.

Euphoria's opportunity cost of producing $1$ bushel of corn is of jeans, and Bellissima's opportunity cost of producing $1$ bushel of corn is of jeans. Therefore, has a comparative advantage in the production of corn, and has a comparative advantage in the production of jeans.