2.3 Emerald Island has a climate that is suited to banana production and yields 840 pounds per acre. Tropical Springs has a climate that is not well-suited for bananas and yields only 250 pounds per acre. Emerald Island has a climate that is not well-suited for mango production and yields 325 pounds per acre. Tropical Springs has a climate that is suited for mangoes and yields 950 pounds per acre. In 2018, there was no trade between Emerald Island and Tropical Springs because of high tariffs and both countries together produced huge quantities of bananas and mangoes. In 2019, tariffs were eliminated because of a new trade agreement. What is likely to happen? Can you justify the trade agreement on the basis of Pareto efficiency? Why or why not? 2.4 In December 2018, tickets to a concert by Andy Lau, a Cantopop legend, that cost HK$980 had a resale price between HK$3,500 and HK$5,000, more than six times their face value. Scalpers usually buy tickets when they are first offered to the public and then sell any ticket, even those in short supply, at some price. In October, Hong Kong’s Consumer Council revised scalping laws to plug a loophole that allowed resale of tickets online at inflated prices with little or no consumer protection. It is argued that ticket touting is efficient. Explain that argument. Others ask how it could be efficient “if only rich people can afford to go to most concerts?” Do you agree? Why or why not?