Suppose that Rob and Big both raise animals and sell them. Because Rob and Big have different talents, they have varying abilities to raise these animals. In 1 day, Rob can produce either 10 cows or 20 pigs. In 1 day, Big can produce either 9 cows or 36 pigs. Assume that Rob and Big decide to specialize completely and trade with one another. Over the course of 1 month (30 days), Rob will produce 300 cows and 0 pigs while Big will produce 0 cows and 1080 pigs.After specialization, suppose that Rob and Big trade with each other and Rob sends Big 195 cows. In order for both Rob and Big to benefit from trade, Big must send Rob more than: (round your answers to two decimal places_ pigs and fewer than _ pigs.

Rob can produce 1 cow by less opportunity cost i.e sacrifising less pigs than Big (2 < 4). Big is 4X productive in Pigs than cows, but Rob is lesser i.e 2X productive in Pigs than cows

So: Rob has comparative advantage in Cow, Big has comparative advantage in Pigs. Complete specialisation means Rob will raise only Cows & Big will raise only Pigs. Rob will sell Cow to Big, Big pigs to Rob.

Monthly Production Capacity with full specialisation [Given]

Cows Pigs

Rob 300 0

Big 0 1080

Trade will be beneficial for both if they both get better than domestic terms of trade : Rob gets more than 2 (20/10) pig per cow. Big gets more than 0.25 (9/36) cow per pig or 4 pigs per cow. So, for 195 cows - Big would send Rob more than 390 (2x195) pigs & less than 780 (4x195) pigs