Nettie can produce either 8 cupcakes or 4 hamburgers. Becky can produce either 4 cupcakes or 8 hamburgers. Suppose that Nettie and Becky each specialize in the production of the good for which they have a comparative advantage and decide to trade. The terms of trade are 1 cupcake for 1 hamburger. After trade, how many hamburgers will Nettie consume if Becky consumes 4 hamburgers? How many cupcakes will Becky consume if Nettie consumes 4 cupcakes?
- Nettie consumes 0 hamburgers, Becky consumes 0 cupcakes
- Nettie consumes 0 hamburgers, Becky consumes 4 cupcakes
- Nettie consumes 4 hamburgers, Becky consumes 0 cupcakes
- Nettie consumes 4 hamburgers, Becky consumes 4 cupcakes