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Consider two neighboring island countries called Felicidad and Arcadia. They each have 4 million labor hours available per week that they can use to produce jeans, rye, or a combination of both. The following table shows the amount of jeans or rye that can be produced using 1 hour of labor.
Country
Jeans
Rye
(Pairs per hour of labor)
(Bushels per hour of labor)
Felicidad
8
32
Arcadia
12
24
When the two countries did not specialize, the total production of jeans was 36 million pairs per week, and the total production of rye was 104 million bushels per week. Because of specialization, the total production of jeans has increased by _____ million pairs per week, and the total production of rye has increased by _____ million bushels per week.
Because the two countries produce more jeans and more rye under specialization, each country is able to gain from trade.
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