The remote island nations of Nearway and Farway produce fish and coconuts and have recently decided to

Question:

The remote island nations of Nearway and Farway produce fish and coconuts and have recently decided to trade with one another. Use the table to answer the following questions:

a. Calculate the opportunity costs of producing fish and coconuts in Nearway and Farway, and then determine who has an absolute advantage and comparative advantage in the production of each good.
b. Using what you learned in part (a), fill in the blanks in the table above.
c. Which nation received the better deal in this trade? Explain using the exchange rate range.
d. Would Nearway and Farway ever trade 60 coconuts for 20 fish? Why or why not?

Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...