Essentials of Economics 8th Edition by Bradley Schiller

تمرين 18

Suppose the two islands in problem 2 agree that the terms of trade will be 1 pineapple for 1 pearl and that trade soon results in an exchange of 10 pearls for 10 pineapples.
( a ) If Alpha produced 6 pearls and 15 pineapples and Beta produced 30 pearls and 8 pineapples before they decided to trade, how much would each be producing after trade became possible? Assume that the two countries specialize just enough to maintain their consumption of the item they export, and make sure each island trades the item for which it has a comparative advantage.
( b ) How much would the combined production of pineapples increase for the two islands due to trade? How much would the combined production of pearls increase?
( c ) How could both countries produce and consume even more?