Elliot and Jordy find themselves on a deserted island. The only two activities available are fishing and finding pineapples. In a full day, Elliot can catch 6 fish or find 12 pineapples or some linear combination of the two; in the same time, Jordy can catch 4 fish or find 10 pineapples or some linear combination of the two. Assume, initially, that there is no possibility of trade between Elliot and Jordy. If Elliot wishes to consume 4 fish per day, what is the maximum number of pineapples that he could consume each day in addition to the 4 fish? Briefly explain your reasoning. If Jordy wishes to consume 2 fish per day, what is the maximum number of pineapples that he could consume each day in addition to the 2 fish? Briefly explain your reasoning.Now assume that trade is possible between Elliot and Jordy. If they want to continue to consume the same number of fish indicated in part (1), how many additional pineapples would they be able to collectively consume each day relative to the no-trade case from part (1)? Briefly explain how you derived your answer.

Comparative advantage is an individual's ability to produce a particular good or service at lower…

Answered: Elliot and Jordy find themselves on a…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Elliot and Jordy find themselves on a deserted island. The only two activities available are fishing and finding pineapples. In a full day, Elliot can catch 6 fish or find 12 pineapples or some linear combination of the two; in the same time, Jordy can catch 4 fish or find 10 pineapples or some linear combination of the two.
Assume, initially, that there is no possibility of trade between Elliot and Jordy. If Elliot wishes to consume 4 fish per day, what is the maximum number of pineapples that he could consume each day in addition to the 4 fish? Briefly explain your reasoning. If Jordy wishes to consume 2 fish per day, what is the maximum number of pineapples that he could consume each day in addition to the 2 fish? Briefly explain your reasoning.
Now assume that trade is possible between Elliot and Jordy. If they want to continue to consume the same number of fish indicated in part (1), how many additional pineapples would they be able to collectively consume each day relative to the no-trade case from part (1)? Briefly explain how you derived your answer.

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