Can someone explain what fair trade is?

Econ hw help! Can someone explain to me a trade that would benefit both people?

  • So stephanie and john both catch fish and pick coconuts. John has the comparative advantage in picking coconuts, for every one fish he catches he loses .2 coconuts while stephanie loses .5 for every fish. Stephanie has comparative advantage in picking coconuts. For every one coconut she picks she loses 2 fish while john loses 5 fish. What is a good trade that would benefit both people? I'm confused how to find this out. thanks!

  • Answer:

    Stephanie has a comparative advantage in picking coconuts. I think you have a typo, John has a comparative advantage in catching fish. If they each do what they're best at, i.e. John catches all fish and Stephanie picks all coconuts and then they trade for what they each need of both, then they will each be doing what they are both most efficient at. The outcome will be optimal for both of them. Try doing out the math for a couple scenarios.

John V at Yahoo! Answers Visit the source

Was this solution helpful to you?

Related Q & A:

Just Added Q & A:

Find solution

For every problem there is a solution! Proved by Solucija.

  • Got an issue and looking for advice?

  • Ask Solucija to search every corner of the Web for help.

  • Get workable solutions and helpful tips in a moment.

Just ask Solucija about an issue you face and immediately get a list of ready solutions, answers and tips from other Internet users. We always provide the most suitable and complete answer to your question at the top, along with a few good alternatives below.