Attempts 0.8 1 Keep the Highest 1 / 4 3. Gains from trade Suppose there exist two imaginary countries, Everglades and Yosemite. Their labor forces are each capable of supplying four million hours per day that can be used to produce pistachios, chinos, or some combination of the two. The following table shows the amount of pistachios or chinos that can be produced by one hour of labor. Pistachios Chinos Country (Pounds per hour of labor) (Pairs per hour of labor) Everglades 4 16 Yosemite 10 Suppose that initially Yosemite uses 1 million hours of labor per day to produce pistachios and 3 million hours per day to produce chinos, while Everglades uses 3 million hours of labor per day to produce pistachios and 1 million hours per day to produce chinos. As a result, Everglades produces 12 million pounds of pistachios and 16 million pairs of chinos, and Yosemite produces 5 million pounds of pistachios and 30 million pairs of chinos. Assume there are no other countries willing to engage in trade, so, in the absence of trade between these two countries, each country consumes the amount of pistachios and chinos it produces. Everglades's opportunity cost of producing 1 pound of pistachios is of chinos, and Yosemite's opportunity cost of producing 1 pound of pistachios is of chinos. Therefore, has a comparative advantage in the production of pistachios, and has a comparative advantage in the production of chinos