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Question: You and your neighbor are the only people in a world that produces only berries and squash. You do not engage in trade with each other. On your own, you can each produce the following per day.
Right now you each split your time between gathering the two products. You currently gather and consume 16 pounds of berries and 4 pounds of squash, while your neighbor is gathering and consuming 6 pounds of berries and 2 pounds of squash. Show (both graphically and numerically) how specialization and then trade with each other can make both of you better off. Who specializes in the production of each product? After specialization, what is an example of a trade that would be beneficial for both of you to make?
Information related to above question is enclosed below:
Attachment:- Berries and Squash.rar
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