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:
If the other island's delegate offers to give you 2 fish for every 1 coconut you give them, you will:
A. refuse their offer because the opportunity cost to you of a coconut is less than 2 fish.
B. accept their offer because you do not have an absolute advantage in fish.
C. accept their offer because you do not have the comparative advantage in fish.
D. refuse their offer because the opportunity cost to you of a coconut is more than 2 fish.
Answer: D
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