Kathy and Jenn can specialize and enjoy gains from trade     In order for Kathy and Jenn to be able to realize gains from trade, each must specialize in production where she has the comparative advantage.

    Jenn should specialize in the production of images, producing 50, while Kathy should specialize in the production of pages, producing 60. Because Kathy can produce more of both images and pages, we can't illustrate gains from trade by simply connecting the two specialization levels of output, drawing a line and calling it a STOR. Kathy can do better on her own than to trade at the output ratio. Such trades would lie below Kathy's PPF, shown to the right as the Not Trade line. Nevertheless, gains from trade can be realized if Kathy and Jenn specialize, just not at these terms of trade.

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