Solved

(Table: Fish and Coconut Production Possibilities) Look at the Table

Question 107

Essay

(Table: Fish and Coconut Production Possibilities) Look at the table Fish and Coconut Production Possibilities.The table shows the maximum amount of fish and coconuts that Tom and Hank can produce if they produce only one good.Tom produces and consumes 9 fish and 2 coconuts, and Hank produces and consumes 3 fish and 2 coconuts.Now they decide to engage in trade.Which of the following statements is incorrect?
A.For both to become better off, each should specialize in the production of some good.However, since Hank is equally productive in both goods, it doesn't matter which good each specializes in.
B.For both to become better off, each should specialize completely in the production of the good in which he has a comparative advantage.
C.After trade it is possible for Tom to consume 9 fish and 2.5 coconuts and for Hank to consume 3 fish and 2.5 coconuts.
D.For each individual, the consumption point after trade will lie outside that individual's production possibility frontier.

Correct Answer:

verifed

Verified

For both to become better off,...

View Answer

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents