Given Below Is the Production Possibilities Schedule for a Small

Given below is the production possibilities schedule for a small island nation in South Pacific that produces capital and consumer goods.Table 2.3

-If a nation specializes in activities in which opportunity costs are the lowest and then trades with other nations, it is most likely to:

A) have a higher standard of living for its citizens than it would if it did not specialize and then trade.
B) have a lower standard of living for its citizens than it would if it did not specialize and then trade.
C) create as much wealth for its citizens as it could if it did not specialize and then trade.
D) benefit in the short run but incur heavy loss in the long run.
E) incur heavy loss in the short run and eventually cease production in the long run.

Correct Answer:

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