Question: Would you please help? Alpha and Beta, two tiny islands off the east coast of Tricoli, produce pearls and pineapples. The production possibilities schedules in

Would you please help?

Would you please help? Alpha and Beta, two tiny islands off theeast coast of Tricoli, produce pearls and pineapples. The production possibilities schedules

Alpha and Beta, two tiny islands off the east coast of Tricoli, produce pearls and pineapples. The production possibilities schedules in the table below describe their potential output in tons per year. Answer several questions about comparative advantage, trade, and gains from trade. Alpha Beta Pearls Pineapples Pearls Pineapples 0 30 0 20 2 25 10 16 20 20 12 15 30 8 8 10 40 4 10 5 45 12 O 50 ON Suppose the two islands agree to trade and that the terms of trade will be 1 ton of pineapples for 1 ton of pearls and that trade soon results in an exchange of 10 tons of pineapples for 10 tons of pearls. Based on comparative advantage, which good should each island specialize in producing? Alpha should specialize in producing Beta should specialize in producing a. If Alpha produced 6 tons of pearls and 15 tons of pineapples and Beta produced 30 tons of pearls and 8 tons of pineapples before they decided to trade, how much would each be producing after trade became possible?a. If Alpha produced 6 tons of pearls and 15 tons of pineapples and Beta produced 30 tons of pearls and 8 tons of pineapples before they decided to trade, how much would each be producing after trade became possible? Note: Assume that the two countries specialize just enough to maintain their consumption of the item they export. Alpha would produce tons of pearls and tons of pineapples Beta would produce tons of pearls and tons of pineapples b. The combined production for the two islands would increase by: tons of pearls tons of pineapples c. How could both islands produce and consume even more? World output and thus the potential gains from trade will be maximized when each island produces according to its

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!