for one truck (How the specific terms of trade are actually determined is not important for this discussion It is enough to know that the final terms of trade will lie somewhere between Seaside’s and Roadway’s opportunity costs for boat and truck production.) Roadway’s truck producers will now get one boat per truck—a far better exchange than was available to them before trade Roadway’s manufacturers will move to produce more trucks and fewer boats until they reach the point on their production possibilities curve at which the terms of trade equals the opportunity cost of producing trucks That occurs at point B in Panel (a) of Figure 17.5 "International Trade Induces Greater Specialization"; Roadway now produces 7,000 trucks and 7,000 boats per year Figure 17.5 International Trade Induces Greater Specialization Before trade, Roadway is producing at point A in Panel (a) and Seaside is producing at point A′ in Panel (b) The terms of trade are one, meaning that one boat exchanges for one truck Roadside moves along its production possibilities curve to point B, at which the curve Attributed to Libby Rittenberg and Timothy Tregarthen Saylor URL: http://www.saylor.org/books/ Saylor.org 895