In: Economics
Producer J and Producer K use land to produce lemons and strawberries. Each producer has available 30 square meters of land. The following table shows the possibilities of production for each producer (working independently):
Square meters of land needed to produce one kg of strawberries |
Square meters of land needed to produce one kg of lemons |
|
Producer J |
3 |
5 |
Producer K |
5 |
3 |
There is no alternative use for the land other than to use it to produce lemons and strawberries.
Complete the following paragraphs by choosing the correct answer from each drop-down menu. Partial credit is awarded too:
To make producers J and K benefit from trade, we can recommend two things. First, we can be recommended that producer [ Select ] ["J", "K"] specializes in the production of lemons and Producer [ Select ] ["J", "K"] specializes in the production of strawberries.
Secondly, we can recommend the following "price" of exchange: one kg of strawberries exchanged for any number of kg lemons that is greater than [ Select ] ["0", "3/5", "1", "5/3"] and smaller than [ Select ] ["0", "3/5", "1", "5/3"]