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 bananas to Robinson Crusoe in exchange for his coconuts. If Robinson Crusoe is to improve his consumption possibilities, the terms of trade must be 1 kg bananas for
A) 3.0 kg coconuts.
B) 2.0 kg coconuts.
C) 1.0 kg coconuts.
D) 0.5 kg coconuts.
E) 0.33 kg coconuts.
Correct Answer:
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