Consider a world of just two individuals, Greta and Carlos, who each need both of two goods, apples and wheat, to survive. They differ in how productive they are in growing apples and wheat. If 100% time is spent on one good, then Greta can produce 2000 apples or 60 tonnes of wheat, and Carlos can produce 1000 apples or 50 tonnes of wheat. In period 1, Carlos and Greta are not able to trade with each other, and they each consume exactly what they produce. They both choose to use 60% of their time in apple production and the rest producing wheat. In period 2, they can trade at the price of 30 apples for 1 tonne of wheat, and Greta consumes 1250 apples.
Describe their production and consumption plans in period 1 and period 2.
Who is better off in period 2, compared to period 1? What can you conclude from comparing the plans in two periods from part a?