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.Both islands specialize exclusively in the product for which they have a comparative advantage.You have agreed to sell the other island 350 coconuts in exchange for 1,300 fish.After the trade your island has a total of _____ coconuts and _____ fish.
A) 150;2,800
B) 500;1,300
C) 150;1,300
D) 500;1,500

Question

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.Both islands specialize exclusively in the product for which they have a comparative advantage.You have agreed to sell the other island 350 coconuts in exchange for 1,300 fish.After the trade your island has a total of _____ coconuts and _____ fish.
A) 150;2,800 
B) 500;1,300 
C) 150;1,300 
D) 500;1,500

Quizplus · Accepted Answer

By specializing,your island produced 500 coconuts and no fish.Trade left you with 350 fewer coconuts and 1,300 fish.

You Are the Minister of Trade for a Small Island