Answer the question on the basis of the following production possibilities data for Gamma and Sigma. All data are in tons.
A. Gamma should export both tea and pots to Sigma.
B. Sigma should export tea to Gamma and Gamma should export pots to Sigma.
C. Gamma should export tea to Sigma and Sigma should export pots to Gamma.
D. Gamma should export tea to Sigma, but it will not be profitable for the two nations to
exchange pots.
ANSWER:
C. Gamma should export tea to Sigma and Sigma should export pots to Gamma.