Given the Following Diagram Showing a Fixed-Quantity Production-Possibilities Frontier, a Community
Given the following diagram showing a fixed-quantity production-possibilities frontier, a Community indifference curve, and the associated autarky price line, if this country is Opened to trade through exposure to different relative prices, the country can attain
A) both a "production gain" ("gains from specialization") and a "consumption gain" ("gains from exchange") .
B) neither a "production gain" ("gains from specialization") nor a "consumption gain" ("gains from exchange") .
C) a "consumption gain" ("gains from exchange") but not a "production gain" ("gains From specialization") .
D) a "production gain" ("gains from specialization") but not a "consumption gain" ("gains from exchange") .
Correct Answer:
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