| |cheese |wine |
|Home |aLC=1 hour per pound |aLW=2 hours per gallon |
|foreign |aLC*=6 hours per pound |aLW*=3 hours per gallon |
From the table, I obtain that aLC in terms aLW for home country is aLC/aLW‹Pc/pW‹aLC*/aLW* and for foreign country will be 1/2‹Pc/Pw/6/3, therefore both home and foreign gain from trade since that ½ will be for home country in producing cheese and 2 will be for foreign country in producing wine.
More over china has no comparative advantage on producing high technology products so instead china has engaged itself mostly on the processing trade, that China imports the inputs from other countries and assemble them, and by doing this it helps china to develop job opportunities, high taxes and innovation capabilities.
Not only that but also on how comparative advantage is measured that economists developed a mathematical equation known as the