Question: Chapter 2 "Problems and Applications" number 2.7 (Related to Solved Problem 2.2 around page 52)

Suppose that France and Germany both produce schnitzel and wine. The following table shows combinations of the goods that each country can produce in a day:

1. Which country has a comparative advantage in producing wine? Which country has a comparative advantage in producing schnitzel?

   France		Germany
   Wine (bottles)	Schnitzel (pounds)	Wine (bottles)	Schnitzel (pounds)
   0	8	0	15
   1	6	1	12
   2	4	2	9
   3	2	3	6
   4	0	4	3
   		5	0

2. Suppose that France is currently producing 1 bottle of wine and 6 pounds of schnitzel, and Germany is currently producing 3 bottles of wine and 6 pounds of schnitzel. Demonstrate that France and Germany can both be better off if they specialize in producing only one good and then trade for the other.

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