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Alpha and Beta, two tiny islands off the east coast of Tricoli, produce pearls and pineapples. The production-possibilities schedules in the table below describe their potential output in tons per year.

(a) What is the opportunity cost of pearls on each island (before trade)?

(b) Which island has a comparative advantage in pineapple production? Please explain your answer Alpha Beta Pearls Pineapples Pearls Pineapples 0 30 0 20 2 25 10 16 4 20 20 12 6 15 30 8 8 10 40 4 10 5 45 2 12 0 50 0

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Macroeconomics, Economics

Category:- Macroeconomics
Reference No.:- M9467473

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