Alpha and Beta, two tiny islands off the east coast of Tricoli, produce pearls and pineapples. The

Question:

Alpha and Beta, two tiny islands off the east coast of Tricoli, produce pearls and pineapples. The production possibilities schedules in the table below describe their potential output in tons per year.

1. Graph the production possibilities confronting each island.

2. What is the opportunity cost of one ton of pineapples on each island?

3. Which island has a comparative advantage in pineapple production?

Alpha Beta Pearls Pineapples Pineapples Pearis 30 20 25 16 20 20 12 15 30 8. 10 40 10 45 2 12 50

Opportunity Cost
Opportunity cost is the profit lost when one alternative is selected over another. The Opportunity Cost refers to the expected returns from the second best alternative use of resources that are foregone due to the scarcity of resources such as land,...