Exchange in an island economy.robin and terry are stranded on a deserted island

Question

Exchange in an island economy.robin and terry are stranded on a deserted island and consume two products, coconut and fish. In a day, robin can catch 2 fish or gather 10 coconuts, and terry can catch 1 fish or gather 1 coconut.

output per day: Robin Terry
fish coconuts fish coconuts
2 10 1 1
terry has a comparative advantage fishing and robin has a comparative advantage in coconuts explain please how come?

suppose that each person is initially self sufficient. In a six-day week, robin produces and consumes 40 coconuts and 4 fish, and terry produces and consumes 4 coconuts and 2 fish

Now supposed robin and terry consume the same number of fish as in the self-sufficient outcome, then specialization and exchange allow robin to consume ---------additional coconuts and terry consumes ------------------additional coconuts

please explain why is comparative and how did you find the answers step by step explanations

thanks:)

Explanation / Answer

The chart came out poorly

So Terry can make 4 fish. This means he can trade 2 to Robin and keep 2 for himself. So Robin needs to make 2 fish (because she ate 4 before). That takes Robin 1 day. That means Robin can make 50 coconuts. Now usually you would give the minimum possible so Robin gets 9 more coconuts and Terry gets 1 more.

It

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.