7. The remote island nations of Nearway and Farway produce fish and coconuts and have recently decided to engage in trade with one another. Use the table to answer the following questions. Coconuts Fish Characteristic Nearway Farway Nearway Farway Optimal production without trade 200 300 100 200 Specialization: Optimal production with trade 600 500 Imported goods 250 250 Post-trade allocation Gains from trade

a. Calculate the opportunity costs of producing fish and coconuts in Nearway and Farway, and then determine who has the comparative advantage in the production of each good.

b. Using what you learned in part (a), fill in the blanks in the table.

c. Which nation received the better deal in this trade? Explain using the terms of trade range.

d. Would Nearway and Farway ever trade 60 coconuts for 20 fish? Why or why not?