You are the Minister of Trade for a small island country with the following annual PPC: 
You are negotiating a trade agreement with a neighboring island with the following annual PPC:
As soon as you see the other island's PPC, you realize there are:
A) no gains from trade because you both have the same comparative advantage.
B) no gains from trade because there is no difference in your ability to harvest coconuts.
C) no gains from trade because the other island has an absolute advantage.
D) gains from trade because your island has a comparative advantage in coconuts.
Correct Answer:
Verified
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