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Suppose you and your friend are stranded on an island, and you must catch fish and find fruit to survive. Through experience, you know that
Suppose you and your friend are stranded on an island, and you must catch fish and find fruit to survive. Through experience, you know that if each of you spends an entire day on either activity, the result will be given in the following table: Fish Fruit John 8 6 Amy 4 a. Who has an absolute advantage? Why? b. What is the opportunity cost of catching an extra fish (in terms of fruit) for John? What is the opportunity cost of catching an extra fish (in terms of fruit) for Amy? c. What is the opportunity cost of finding an extra fruit (in terms of fish) for John? What is the opportunity cost of finding an extra fruit (in terms of fish) for Amy? d. Who has a comparative advantage in catching fish? Who has a comparative advantage in finding fruit? For maximum productivity, who should catch fish and who should find fruit
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