question number three in which the problem that must be filled in and answered starts with the word initially

73% Mon 9:2 iew History Bookmarks Window Help A ng.cengage.com C Google nvas Topic: Blog Two (Scientific Rev) MindTap - Cengage Learning CENGAGE | MINDTAP Q Search this Homework (Ch 03) Back to Assignment Attempts: Keep the Highest: / 4 3. Gains from trade Consider two neighboring island countries called Euphoria and Contente. They each have 4 million labor hours available per month that they can use to produce jeans, corn, or a combination of both. The following table shows the amount of jeans or corn that can be produced using 1 hour of labor. Jeans Corn Country (Pairs per hour of labor) ( Bushels per hour of labor) Euphoria 20 Contente 8 16 Initially, suppose Contente uses 1 million hours of labor per month to produce jeans and 3 million hours per month to produce corn, while Euphoria uses 3 million hours of labor per month to produce jeans and 1 million hours per month to produce corn. Consequently, Euphoria produces 15 million pairs of jeans and 20 million bushels of corn, and Contente produces 8 million pairs of jeans and 48 million bushels of corn. 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 jeans and corn it produces. Euphoria's opportunity cost of producing 1 pair of jeans is_ of corn, and Contente's opportunity cost of producing 1 pair of jeans is of corn. Therefore, has a comparative advantage in the production of jeans, and has a comparative advantage in the production of corn. Suppose that each country completely specializes in the production of the good in which it has a comparative advantage, producing only that good. In 624 8 W F6 F8 co 10 O R T Y U O D G H