United States Canada Lumberjack shirts Lumberjack boots Lumberjack shirts

                        United States                                                           Canada

Lumberjack shirts        Lumberjack boots                   Lumberjack shirts       Lumberjack boots

A                  12                                    0                                                   6                                    0

B                    3                                    3                                                   3                                    3

C                     0                                   4                                                   0                                    6

16. How the two countries should specialize and how much of output will they produce while specializing

a. Canada in shirt; 6 shirt and no boots; The United States in boots; 4 boots, no shirts

b. The United States in shirts; 12 shirts, 0 boots; Canada in boots, 6 boots, 0 shirts

17. If each country trades half of what it makes for half of what the other makes, the term of trade will be:

a.    3 boots = 3 shirts                b. 6 shirts = 3 boots               c. 12 shirts = 3 boots

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