resources. Point A on both graphs is where the countries start producing and consuming before trade. Point B is

where they end up after trade.

Let’s say that, in the situation before trade, each nation prefers to produce a combination of shoes and

refrigerators that is shown at point A. Table 19.9 shows the output of each good for each country and the total
458 19 • International Trade

output for the two countries.

Country

Current Shoe Production Current Refrigerator Production

United States 5,000

Mexico

4,000

Total

9,000

20,000

5,000

25,000

TABLE 19.9 Total Production at Point A before Trade

Continuing with this scenario, suppose that each country transfers some amount of labor toward its area of

comparative advantage. For example, the United States transfers six workers away from shoes and toward

producing refrigerators. As a result, U.S. production of shoes decreases by 1,500 units (6/4 × 1,000), while its
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