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AP® Microeconomics

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Comparative Advantage: Gains of Trade for Tea and Coffee

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The following tables give production possibilities for the United States and Great Britain for tea and coffee if they choose not to trade.

United States

A B C D E
Tea 0 15 30 45 60
Coffee 20 15 10 5 0



Great Britain

A B C D E
Tea 0 10 20 30 40
Coffee 20 15 10 5 0



If the two countries are currently producing at possibility C, what would be the gains from trade if the two countries instead chose to specialize based on their comparative advantages?

A

$60$ units of tea and $20$ units of coffee

B

$50$ units of tea and $20$ units of coffee

C

$10$ units of tea and $20$ units of coffee

D

$10$ units of tea

E

$10$ units of coffee