In the Figure Given Below AB Is the Production-Possibility Curve

Multiple Choice

In the figure given below AB is the production-possibility curve of Canada. In the absence of trade, the price ratio is 1 bushel of wheat/bale of cotton as shown by the line PQ. The international price ratio is 0.25 bushels of wheat/bale of cotton as shown by the line RS. I₁ and I₂ are the pre-trade and the post trade community indifference curves of Canada respectively. After Canada engages in free trade, it will:

A) produce at point S₁ and consume at point C₁.
B) produce and consume at point C_0.
C) produce at point S₁ and consume at point C_0.
D) produce and consume at point C1.