The diagram below shows Robinson Crusoe's annual production possibilities boundary for the production of bananas and coconuts.
FIGURE 33- 3
-Refer to Figure 33- 3. Suppose that a trading partner offers to give coconuts to Robinson Crusoe in exchange for his bananas. If Robinson Crusoe is to improve his consumption possibilities, the terms of trade must be 1 kg coconuts for
A) 5 kg bananas.
B) 4 kg bananas.
C) 3 kg bananas.
D) 2 kg bananas.
E) 1 kg bananas.
Correct Answer:
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