Consider a simple island economy where the sun is always gentle and warm and the breezes are cool. Let's call this island DanLand. There are four product markets in DanLand: coconuts, fish, textiles, and beer. Coconuts grow freely around DanLand and workers need only to harvest them, split them, and bring them to market for sale. Fish swim freely in the ocean. There are no fish farms. Fish are caught by workers using fishing tackle. Textiles are hand woven on the island, the workers gather the materials they need as the materials grow freely throughout the island. Beer is fermented in large vats using coconuts and other plants growing on the island. Beer is sold in bottles, which are available freely on the island as the island has been recycling for decades. Beer may also be sold in coconut shells. Only 1 weeks' worth of beer may be stored on the island. DanLand does not interact economically with any other nation owing to deeply held cultural and religious beliefs. DanLand also basically bans technology and importing anything that resembles technology or complex machines. Those core values are not going to change in anyone's lifetimes.
There are no imports or exports from DanLand and there is no government on DanLand, except for the benevolent elected dictator Dan. Dan spends his days fishing and playing with his grandsons, pretty much letting the island run itself. There are 4 resource markets on DanLand: coconut seedlings, fishing tackle, laborers (skilled at all tasks), and refuse workers. The rest of the resources on DanLand are just there and for them, markets are not needed.
Questions:
1. A strange event befalls DanLand, the residents stop consuming textiles that is the demand for textiles plummets as DanLand residents suddenly prefer to run around without clothes. Provide a brief analysis explaining what is likely to happen across the DanLand economy.
2. Without reaching too far into your imagination, explain how the economy of DanLand might grow. Do you see this growth as making individuals on DanLand richer In terms of a standard of living rise or do you see this growth causing more activity allowing more DanLand residents to exist?