The accompanying figure shows the annual production possibilities curve for a small country that is open to trade with the rest of the world. Suppose the world price of cashews is $12 per pound, and the world price of mangos is $4 per pound. As indicated in the figure, at these prices, this country will produce 21,000 pounds of mangos and 5,000 pounds of cashews each year.
At this country's current level of production, what is the opportunity cost of a pound of mangos in terms of cashews?
A. 1/3 pounds of cashews
B. 5/21 pounds of cashews
C. 21/5 pounds of cashews
D. 3 pounds of cashews
Answer: A
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