Country Denali Congaree Suppose that initially Denali uses 1 million hours of labor per day to produce shorts and 3 million hours per day to produce almonds, while Congaree. uses 3 million hours of labor per day to produce shorts and 1 million hours per day to produce almonds. As a result, Denali produces 6 million pairs of shorts and 36 million pounds of almonds, and Congaree produces 12 million pairs of shorts and 16 million pounds of almonds. 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 shorts and almonds it produces. Denali's opportunity cost of producing 1 pair of shorts is of almonds. Therefore, comparative advantage in the production of almonds. Shorts (Pairs per hour of labor) 6 4 Suppose that each country completely specializes in the production of the good in which it has a comparative advantage, producing only that good. In this case, the country that produces shorts will produce million pairs per day, and the country that produces almonds will produce million pounds per day. In the following table, enter each country's production decision on the third row of the table (marked "Production"). Suppose the country that produces shorts trades 14 million pairs of shorts to the other country in exchange for 42 million pounds of almonds. In the following table, select the amount of each good that each country exports and imports in the boxes across the row marked "Trade Action," and enter each country's final consumption of each good on the line marked "Consumption." Without Trade Almonds (Pounds per hour of labor) When the two countries did not specialize, the total production of shorts was 18 million pairs per day, and the total production of almonds was 52. million pounds per day. Because of specialization, the total production of shorts has increased by million pairs per day, and the total production of almonds has increased by million pounds per day. Production Consumption Because the two countries produce more shorts and more almonds under specialization, each country is able to gain from trade. With Trade Calculate the gains from trade-that is, the amount by which each country has increased its consumption of each good relative to the first row of the table. In the following table, enter this difference in the boxes across the last row (marked "Increase in Consumption"). Production 12 16 Trade action of almonds, and Congaree's opportunity cost of producing 1 pair of shorts is has a comparative advantage in the production of shorts, and has a Consumption Gains from Trade Increase in Consumption 6 6 000 Denali Almonds Shorts Shorts Almonds (Millions of pairs) (Millions of pounds) (Millions of pairs) (Millions of pounds) 36 36 000 12 Congaree 12 16 16