Business, 15.06.2021 16:00 chevystewart6628

Alpha and Beta, two tiny islands in the Pacific, produce pearls and pineapples. The following production possibilities schedules describe their potential output in tons per year: ATTACHMENT IS BELOW

Suppose Alpha and Beta agree that the terms of trade will be one for one and exchange 10 pearls for 10 pineapples.

a. If Alpha produced 6 pearls and 15 pineapples while Beta produced 30 pearls and 8 pineapples before they decided to trade, how many pearls would each be producing after trade? Assume that the two countries specialize according to their comparative advantage.

(i) Alpha: _ pearls
(ii) Beta: _ pearls

b. How much would the combined production of pineapples increase for the two islands due to specialization?
_ pineapples

c. How much would the combined production of pearls increase?
_ pearls

d. What is the post-trade consumption for each island?
Alpha consumes _ pearls and _ pineapples.
Beta consumes _ pearls and _pineapples.

Alpha and Beta, two tiny islands in the Pacific, produce pearls and pineapples. The following produ

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Alpha and Beta, two tiny islands in the Pacific, produce pearls and pineapples. The following produc...