Assume that it takes 8 minutes to transport the good (5 Mile Round Trip) to the other island. You can transport 7 coconuts at a time, and the market price of a coconut is 4.5 water. Calculate the opportunity cost of transporting coconuts in terms of water (use the market price) and the net gain to the home producer. Will trade still occur?

Answer rating: 100% (QA)

Opportunity cost of transportation coconuts produced per minute minutes spent on transportation mark... View the full answer