M$11$ Interactive Practice $-$

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Calculating Mutually Beneficial Terms of Trade

Calculating Mutually Beneficial Terms of Trade

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Suppose that Geordan faces the following opportunity costs:

The opportunity cost of producing $1$ unit of desks is $5$ units of chairs.

The opportunity cos$.$ of producing $1$ unit of chairs is $0\mathrm{.}2$ units of desks.

Suppose that Girius faces the following opportunity costs:

The opportunity cost of producing $1$ unit of desks is $2$ units of chairs.

The opportunity cost of producing $1$ unit of chairs is $0\mathrm{.}5$ units of desks.

Both parties will benefit from trade if $1$ unit of desks trades for $$ unit$($s$)$ of chairs,

Both parties will benefit from trade if $1$ unit of chairs trades for $$ unit$($s$)$ of desks.

Directions: Answer the questions above based on the information given. Round your numerical responses to the