Multiple Choice
You are the Minister of Trade for a small island country in the South Pacific with the following annual production possibilities curve:
You are negotiating a deal with a neighboring island that has the following annual PPC:
Refer to the figure above.When the other island's delegate offers to give you 1,000 fish in exchange for 500 coconuts,you:
A) accept because you will then have a total of 2,500 fish.
B) refuse because the trade would leave you at a level of consumption that is less than what you could produce on your own.
C) accept because the trade will leave you at a level of consumption that is more than what you could produce on your own.
D) counter,offering to give them 400 coconuts in exchange for 1,000 fish.
Correct Answer:

Verified
Correct Answer:
Verified
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