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1. Figure 2-10 Tahiti Bora Bora Honey Honey (gallons) (gallons) 540 480 400 MILK 360 Milk (gallons) (gallons) Figure 2-10 shows the production possibilities frontiers
1. Figure 2-10 Tahiti Bora Bora Honey Honey (gallons) (gallons) 540 480 400 MILK 360 Milk (gallons) (gallons) Figure 2-10 shows the production possibilities frontiers for Tahiti and Bora Bora. Each country produces two goods, milk and honey. a) Refer to Figure 2-10. What is the opportunity cost of producing one gallon of milk in Tahiti? (2 Points) b) Refer to Figure 2-10. What is the opportunity cost of producing one gallon of milk in Bora Bora? (2 Points) c) Refer to Figure 2-10. What is the opportunity cost of producing one gallon of honey in Tahiti? (2 Points) d) Refer to Figure 2-10. What is the opportunity cost of producing one gallon of honey in Bora Bora? (2 Points) e) Refer to Figure 2-10. Which country has a comparative advantage in the production of milk? You need to show how you reached out to your conclusion. (6 Points) () Refer to Figure 2-10. Which country has a comparative advantage in the production of honey? You need to show how you reached out to your conclusion. (6 Points) g) Refer to Figure 2-10. If the two countries have the same amount of resources and the same technological knowledge, which country has an absolute advantage in the production of milk? (3 Points)
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