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(5) Island A is more productive (uses less labour) in the production of both goods compared to Island B. why would A and B trade
(5) Island A is more productive (uses less labour) in the production of both goods compared to Island B. why would A and B trade with each other under these circumstances?\"Consider the singlefactor production function, l' = AL, for Island A and B. Each island has 100 units of labor {and they cannot move across islands). Island A can produce one unit of agricultural product with 4 units of labor and can produce one unit of electronic product with 2 units of labor (i .e., A is U4 for agriculture and U2 for electronics}. Island B can produce one unit of agricultural product with 5 units of labor and produce one unit of electronic product with 4 units of labor {i.e., A is US for agriculture and U4 for electronics). People on both islands must consume both goods; for example, if no agricultural product is produced, its price will go to innity. Assume the two islands can trade with each other at no cost. Please note that Island A and A (in italics) are different. with the latter representing (in this production function) the amount of labour effort required to make one or the other goods
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