Assume that Debra and Mike, without trading with each other, will produce and consume the following number of pizzas and wings Now, assume that both Debra and Mike decide to specialize, and then Debra trades 19 pizzas to Mike for 47 wings. This outcome is shown in the table below. Compared to the result without trade, what are the gains from trade that Debra experiences when she and Mike specialize and trade?
What will be an ideal response?
1 pizza and 7 wings
Feedback:
Specialization leads to greater productivity. But Debra and Mike would both like to eat pizza and wings. So if they specialize and then trade with each other, they will benefit. If Debra gives Mike 19 pizzas in exchange for 47 wings, she is better off by 1 pizza and 7 wings. (Mike, in this scenario, has the same gains from trade, 1 pizza and 7 wings.)
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