Jake and Larry find themselves on a deserted island. Jake can either produce 5 fish or 10 coconuts in a day (or any combination in between). Larry can produce either 8 fish or 4 coconuts in a day (or any combination in between). Jake prefers to consume 6 coconuts when producing/consuming alone, and Larry prefers 4 coconuts when producing/consuming alone. They also enjoy the corresponding number of fish, respectively. Find their gains from specialization if they decide to specialize and trade their output (that is, how many extra fish and/or coconuts can they jointly consume?
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Jake and Larry find themselves on a deserted island. Jake can either produce 5 fish or 10 coconuts i...
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