George and Bill are stuck together on a desert island. There are two goods, Coco

Question

George and Bill are stuck together on a desert island. There are two goods, Coconut (C) and Bananas (B). George has production function 5C+B=40, while Bill has production function C+3B=36. If they could not trade, George would choose to product 6C, while Bill would produce 10B. 1: Figure out George's opportunity cost; 2: Figure out Bill's opportunity cost; 3: Figure out each party’s comparative advantage; 4: Determine which good each party should specialize in, and determine production.

**Please explain the equations for opportunity cost thank you!

Explanation / Answer

Ans-1. If they could not trade, George would choose to product 6C, while Bill would produce 10B.6C=10B.

What we realy want to know is how much of beef we could have produced if we choose to produce 1 unit of coconut ,but the questionn gave us 6 units.To reduce this question we devide each side by 10, this gives us

3C=5B

And then reducing it down one more time we get,

1C=5/3B

That's our answer the opportunity cost of producing an unit of corn is 5/3 unit of banana.

So George's opportunity cost is 5/3.

2. if we choose to produce 1 unit of banana,but the questionn gave us 10 units.To reduce this question we devide each side by 10, this gives us

10B=6C

B=3/5C

That's our answer the opportunity cost of producing an unit of banana is 3/5 unit of corn.

So bill's opportunity cost is 3/5.

3.

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