The diagram illustrates the production possibility curves for countries X and Y. If productivity falls, country X’s production possibility curve shifts from X1 to X2. Which statement is correct?
- AAfter the change X would export raw materials and import manufactured goods.
- BAfter the change there is no economic basis for trade.
- CBefore the change Y had an absolute advantage in the production of raw materials.
- DBefore the change X had a comparative advantage in both products.