George and Bill are stuck together on a desert island. There are two goods, Coconut (C) and Bananas (B). George has production function 5C+B=40, while Bill has production function C+3B=36. If they could not trade, George would choose to produce 6 units of C, while Bill would produce 10 units of B.
1) Figure out George's opportunity cost.
2) Figure out Bill's opportunity cost.
3) Figure out each party’s comparative advantage.
4) Determine which good each party should specialize in, and determine production.