Question

1. Dan and Patrick are stranded on a deserted island. They survive by catching fish and gathering coconuts. In one day, Dan can pick 12 coconuts or catch 6 fish and Patrick can pick 4 coconuts or catch 12 fish. They can divide their time in any way between the two tasks without any loss of efficiency. When alone, they each choose to spend half of their time on fish and half on coconuts.

a) Draw the production possibility frontier for Dan and Patrick when they work together. Indicate the slope(s) and intercepts of this curve. Indicate the point which represents the total quantities that the two were consuming when alone. Is this point efficient when working together?

b) If, when working together, Dan and Patrick choose to consume the same number of fish as when they were alone, how many coconuts can they consume?

Answer 1