Consider the following scenario to answer the next question:

On a particular Saturday, Arden and Will can either plant tomatoes or geraniums. Their maximum output per day is listed in the table below, along with spaces where you can calculate the opportunity cost.

| | Tomatoes Planted | Opportunity Cost of 1 Tomato | Geraniums Planted | Opportunity Cost of 1 Geranium |
|---------------|------------------|-----------------------------|------------------|-------------------------------|
| Arden | 4 | | 3 | |
| Will | 4 | | 6 | |

At what terms of trade (relative price ratio) could they specialize and trade with one another so that both have more geraniums and tomatoes planted than they could accomplish on their own?

A. 4 tomatoes planted per 2 geraniums planted
B. 4 tomatoes planted per 3 geraniums planted
C. 4 tomatoes planted per 5 geraniums planted
D. 4 tomatoes planted per 8 geraniums planted
E. 4 tomatoes planted per 9 geraniums planted

The optimal terms of trade for Arden and Will in this scenario would be 4 tomatoes planted per 3 geraniums planted. This would allow both of them to have more geraniums and tomatoes than they could each achieve alone.

By specializing in what they can produce more efficiently and trading with each other at this agreed-upon ratio, Arden can plant 4 tomatoes while Will plants 3 geraniums. The opportunity cost for Arden will be 3 geraniums planted (4 tomatoes planted – 1 geranium planted) while the opportunity cost for Will will be 5 tomatoes planted (6 geraniums planted – 1 tomato planted).

As a result, both of them can achieve gains from trade; Arden will obtain 3 geraniums planted while Will will get 2 tomatoes planted, which is more than they could each achieve on their own.

know more about trading here

https://brainly.com/question/31526658#

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