countries can benefit. Again, the production possibility frontier is a useful tool to visualize this benefit.

Consider a situation where the United States and Mexico each have 40 workers. For example, as Table 19.8

shows, if the United States divides its labor so that 40 workers are making shoes, then, since it takes four

workers in the United States to make 1,000 shoes, a total of 10,000 shoes will be produced. (If four workers can

make 1,000 shoes, then 40 workers will make 10,000 shoes). If the 40 workers in the United States are making

refrigerators, and each worker can produce 1,000 refrigerators, then a total of 40,000 refrigerators will be

produced.

Country

Shoe Production — using 40 workers

Refrigerator Production — using 40 workers

United States 10,000 shoes

or 40,000 refrigerators

Mexico

8,000 shoes

or 10,000 refrigerators

TABLE 19.8 Production Possibilities before Trade with Complete Specialization
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