produces/consumes 20 barrels of oil and 60 bushels of corn. Given their current production levels, if the

United States can trade an amount of corn fewer than 60 bushels and receive in exchange an amount of oil

greater than 20 barrels, it will gain from trade. With trade, the United States can consume more of both goods

than it did without specialization and trade. (Recall that the chapter Welcome to Economics! defined

specialization as it applies to workers and firms. Economists also use specialization to describe the occurrence

when a country shifts resources to focus on producing a good that offers comparative advantage.) Similarly, if

Saudi Arabia can trade an amount of oil less than 60 barrels and receive in exchange an amount of corn

greater than 10 bushels, it will have more of both goods than it did before specialization and trade. Table 19.5

illustrates the range of trades that would benefit both sides.

The U.S. economy, after specialization, will
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