Refer to the Above Diagrams

Multiple Choice

Refer to the above diagrams.The solid lines are production possibilities curves; the dashed lines are trading possibilities curves.The trading possibilities curves imply that:

A) both countries are experiencing an excess of exports over imports which results in economic growth.
B) the domestic production possibilities curves entail unemployment and/or the domestic misallocation of resources.
C) world resources will be allocated more efficiently if the two nations specialize and trade in accordance with comparative advantage.
D) both nations will be worse off as a result of international specialization and trade.