Answer:
Step-by-step explanation:
Mikhail’s Furnishings: 160 carpets or 160 quilts
Dominique’s Parlor: 120 carpets or 200 quilts
<u>Current production per month</u>
Mikhail’s: 80 carpets and 80 quilts
Dominique’s: 60 carpets and 100 quilts
<u>Post-trade</u>
Mikhail’s: produces 160 carpets
Dominique’s: produces 200 quilts
They trade 90 quilts for 70 carpets so at the end of trade they will have items as follows
Mikhail’s carpets will reduce from 160-70=90 carpets but have additional 70 quilts
Dominique’s quilts will reduce from 200-90=110 but have additional carpets of 70
<u>Gains from trade</u>
Comparing outcome of post-trade with current production
Mikhail’s Furnishings: 90 carpets-80 carpets=10 carpets
90 quilts-80 quilts=10 quilts
Dominique’s Parlor: 70 carpets -60 carpets=10 carpets
110 quilts-100 quilts=10 quilts
