production of cheese and will produce at point P.Given the quantities traded,conm pounds of chee and bottles of wine. This is point C on the graph.The graph for Country B is similar except that Country B will produce only wine and the trade line will intersect their production frontier on the wine axis. Prove that both countries have gained from trade? Both countries have gained from trade because they cannow both consume more of both goods that they could before trade.Graphically wecan see this by noticing that the trade line lies to the leftof the production frontier.After trade,the country can consume on the trade line and is able to consume more ofboth goods.Numerically. Country A consumes4 more pounds of cheese and I more bottle of wine after trade as compared to pre-trade,and Country B consumes 6 more pounds ofcheese and 1 more bottle of wine e. What is the slope of the price line at which trade occurs? We assumed-4.which is somewhere between the pre-trade prices.All that we can say from the information given is that it will be somewhere between the pre-trade prices,or the slopes of the two production frontiers. We would need more information about demand for the two products in each country to determine the exact post-trade prices.production of cheese and will produce at point P. Given the quantities traded, Country A will consume 80-36=44 pounds of cheese and 0+9 bottles of wine. This is point C on the graph. The graph for Country B is similar except that Country B will produce only wine and the trade line will intersect their production frontier on the wine axis. d. Prove that both countries have gained from trade? Both countries have gained from trade because they can now both consume more of both goods that they could before trade. Graphically we can see this by noticing that the trade line lies to the left of the production frontier. After trade, the country can consume on the trade line and is able to consume more of both goods. Numerically, Country A consumes 4 more pounds of cheese and 1 more bottle of wine after trade as compared to pre-trade, and Country B consumes 6 more pounds of cheese and 1 more bottle of wine. e. What is the slope of the price line at which trade occurs? We assumed –4, which is somewhere between the pre-trade prices. All that we can say from the information given is that it will be somewhere between the pre-trade prices, or the slopes of the two production frontiers. We would need more information about demand for the two products in each country to determine the exact post-trade prices