Question: Bob Lives Alone In An Island. He Collects Bananas And Oranges. Alice Lives In A Neighbour Island And She Is Also Collecting Bananas And Oranges. They Both Work 10 Hours Each Day. Alice Is Good At Collecting Bananas, She Can Collect 6kg Of Bananas Per Hour Whereas Bob Collects 4kg Of Bananas Per Hour. Bob Is Good At Collecting Oranges, He Can Collect …

Bob lives alone in an island. He collects bananas and oranges.
Alice lives in a neighbour island and she is also collecting
bananas and oranges. They both work 10 hours each day. Alice is
good at collecting bananas, she can collect 6kg of bananas per hour
whereas Bob collects 4kg of bananas per hour. Bob is good at
collecting oranges, he can collect 2kg of oranges per hour whereas
Alice collects 1kg of oranges per hour. (a) (8 marks) Draw the
production possibilities frontier (PPF) for Bob, for Alice, and for
the combined 2-person economy. (b) (12 marks) Assume without trade,
each spend half of her/his time in collecting apples and the
remaining half in collecitng oranges. What quantities of apples and
oranges does each person collect? Starting from a position without
trade, give an example in which trade makes each person better off
(each consumes more apples and more oranges). [Hint: Illustrate
your answer on the production possibilities frontiers.]