Exchange in an Island Economy Robin and Terry are stranded on a deserted island and...
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Exchange in an Island Economy Robin and Terry are stranded on a deserted island and consume two products coconuts and fish In a day Robin can catch 2 fish or gather 8 coconuts and Terry can catch 1 fish or gather 1 coconut Terry Fish 2 Robin Coconuts 8 Fish 1 Coconuts 1 Output per day Terry has a comparative advantage fishing and Robin has a comparative advantage gathering coconuts Suppose that each person is initially self sufficient In a six day week Robin produces and consumes 32 coconuts and 4 fish and Terry produces and consumes 4 coconuts and 2 fish Now suppose Robin and Terry engage in specialization and exchange trading 2 coconuts for 1 fish If Robin and Terry consume the same number of fish as in the self sufficient outcome then specialization and exchange allow Robin to consume additional coconuts enter your response as an integer
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