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You Are the Minister of Trade for a Small Island

Question 94

Multiple Choice

You are the Minister of Trade for a small island country in the South Pacific with the following annual production possibilities curve: You are the Minister of Trade for a small island country in the South Pacific with the following annual production possibilities curve: You are negotiating a deal with a neighboring island that has the following annual PPC: Refer to the figure above.When the other island's delegate offers to give you 1,000 fish in exchange for 500 coconuts,you: A) accept because you will then have a total of 2,500 fish. B) refuse because the trade would leave you at a level of consumption that is less than what you could produce on your own. C) accept because the trade will leave you at a level of consumption that is more than what you could produce on your own. D) counter,offering to give them 400 coconuts in exchange for 1,000 fish.
You are negotiating a deal with a neighboring island that has the following annual PPC: You are the Minister of Trade for a small island country in the South Pacific with the following annual production possibilities curve: You are negotiating a deal with a neighboring island that has the following annual PPC: Refer to the figure above.When the other island's delegate offers to give you 1,000 fish in exchange for 500 coconuts,you: A) accept because you will then have a total of 2,500 fish. B) refuse because the trade would leave you at a level of consumption that is less than what you could produce on your own. C) accept because the trade will leave you at a level of consumption that is more than what you could produce on your own. D) counter,offering to give them 400 coconuts in exchange for 1,000 fish.
Refer to the figure above.When the other island's delegate offers to give you 1,000 fish in exchange for 500 coconuts,you:


A) accept because you will then have a total of 2,500 fish.
B) refuse because the trade would leave you at a level of consumption that is less than what you could produce on your own.
C) accept because the trade will leave you at a level of consumption that is more than what you could produce on your own.
D) counter,offering to give them 400 coconuts in exchange for 1,000 fish.

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