If the fictitious country of Islandia puts all of its production resources into fish, it can produce 60 units of fish. If it puts all of its production resources into coconuts, it can produce 45 units of coconuts. If the fictitious country of Mountania puts all of its production resources into fish, it can produce 30 units of fish. If it puts all of its production resources into coconuts, it can produce 20 units of coconuts. Assume that both countries have constant cost functions for both products. a. What is the opportunity cost of producing 1 unit of fish in Islandia?unit(s) of coconutsb. What is the opportunity cost of producing 1 unit of coconuts in Islandia?unit(s) of fishc. What is the opportunity cost of producing 1 unit of fish in Mountania?unit(s) of coconutsd. What is the opportunity cost of producing 1 unit of coconuts in Mountania?unit(s) of fishe. (Click to select) has a comparative advantage in the production of fish.(Click to select) | has a comparative advantage in the production of coconuts.f. What will be the terms of trade for fish?Betweenandunit(s) of coconutsg. What will be the terms of trade for coconuts?Betweenunit(s) of fishand

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Answered: If the fictitious country of Islandia…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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If the fictitious country of Islandia puts all of its production resources into fish, it can produce 60 units of fish. If it puts all of its production resources into coconuts, it can produce 45 units of coconuts. If the fictitious country of Mountania puts all of its production resources into fish, it can produce 30 units of fish. If it puts all of its production resources into coconuts, it can produce 20 units of coconuts. Assume that both countries have constant cost functions for both products.

a. What is the opportunity cost of producing 1 unit of fish in Islandia?
unit(s) of coconuts
b. What is the opportunity cost of producing 1 unit of coconuts in Islandia?
unit(s) of fish
c. What is the opportunity cost of producing 1 unit of fish in Mountania?
unit(s) of coconuts
d. What is the opportunity cost of producing 1 unit of coconuts in Mountania?
unit(s) of fish
e. (Click to select) has a comparative advantage in the production of fish.
(Click to select) | has a comparative advantage in the production of coconuts.
f. What will be the terms of trade for fish?
Between
and
unit(s) of coconuts
g. What will be the terms of trade for coconuts?
Between
unit(s) of fish
and

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