exports 4,000 refrigerators to Mexico in exchange for 1,800 pairs of shoes would benefit both sides, in the

sense that both countries would be able to consume more of both goods than in a world without trade.

The U.S. economy, after specialization, will benefit

The Mexican economy, after specialization, will benefit

if it:

if it:

Exportsfewer than 6,000 refrigerators

Importsat least 2,500 refrigerators

Importsat least 1,500 pairs of shoes

Exportsno more than 2,000 pairs of shoes

TABLE 19.11 The Range of Trades That Benefit Both the United States and Mexico

Trade allows each country to take advantage of lower opportunity costs in the other country. If Mexico wants to

produce more refrigerators without trade, it must face its domestic opportunity costs and reduce shoe

production. If Mexico, instead, produces more shoes and then trades for refrigerators made in the United
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