Exchange in an Island Economy. Robin and Terry are stranded on a deserted island and consume two products, coconuts and fish. In a day, Robin can catch two fish or gather eight coconuts, and Terry can...

Exchange in an Island Economy. Robin and Terry are stranded on a deserted island and consume two products, coconuts and fish. In a day, Robin can catch two fish or gather eight coconuts, and Terry can catch one fish or gather one coconut.

a.Use these numbers to prepare a table like Table 3.1 on page 77. Which person has a comparative advantage in fishing? Which person has a comparative advantage in gathering coconuts?

b. Suppose that each person is initially self-sufficient. In a 6-day week, Robin produces and consumes 32 coconuts and four fish, and Terry produces and consumes three coconuts and three fish. Show that specialization and exchange (at a rate of three coconuts per fish) allows Robin to consume more coconuts and the same number of fish and allows Terry to consume more coconuts and the same number of fish. Illustrate your answer with a graph like Figure 3.1 on page 78.