Gains from trade

Suppose there exist two imaginary countries, Sequoia and Yosemite. Their labor forces are each capable of supplying four million hours per day that can be used to produce chinos, pistachios, or some combination of the two. The following table shows the amount of chinos or pistachios that can be produced by one hour of labor:

$\backslash$table$[[,$Chinos,Pistachios$],[$Country$,($Pairs per hour of labor$),($Pounds per hour of labor$)],[$Sequola$,5,20],[$Yosemite$,8,16]]$

Suppose that initially Yosemite uses $1$ million hours of labor per day to produce chinos and $3$ million hours per day to produce pistachios, while Sequola uses $3$ million hours of labor per day to produce chinos and $1$ million hours per day to produce pistachios. As a result, Sequoia produces $15$ million pairs of chinos and $20$ million pounds of pistachios, and Yosemite produces $8$ million pairs of chinos and $48$ million pounds of pistachios. 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 chinos and pistachios it produces.

Sequola's opportunity cost of producing $1$ pair of chinos is $$ of pistachios, and Yosemite's opportunity cost of producing I pair of chinos. is $$ of pistachios. Therefore, $$ has a comparative advantage in the production of chinos, and $$ has a comparative advantage in the production of pistachios.