Each diagram presents the production possibility curves for two economies, X and Y, that make food and clothes. In which diagram would both economies gain from specialising in the good for which they have comparative advantage and then trading at an exchange rate of 1 unit of clothes for 1.5 units of food?
- A[IMAGE:9708_s11_qp_11_p8_diagram_3]
- B[IMAGE:9708_s11_qp_11_p8_diagram_4]
- C[IMAGE:9708_s11_qp_11_p8_diagram_5]
- DDiagram D