Multiple Choice
Exhibit B-1 below shows the quantity of thing-a-ma-jigs or truffala fruit that can be produced by each country, if all of its resources are devoted to that product.

-Given the data in Exhibit B-1
A) Canary Island should produce coconuts and trade with Barbootland for kiwi fruit.
B) Canary Island should produce kiwi fruit and trade with Barbootland for coconuts.
C) Barbootland should produce coconuts and trade with Canary Island for kiwi fruit.
D) trade is not possible because Barbootland does not have a comparative advantage in producing either good.
E) trade is not possible because Barbootland has an absolute advantage in production of both goods.
Correct Answer:
Verified
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