Microeconomics 18th Edition by Campbell McConnell, Stanley Brue, Sean Flynn

Exercise 5

Suppose nation A can produce 80 units of X by using all its resources to produce X or 60 units of Y by devoting all its resources to Y. Comparative figures for nation B are 60 units of X and 60 units of Y. Assuming constant costs, in which product should each nation specialize Why Indicate the limits of the terms of trade.