The diagram shows the production possibility curves (PPCs) for country X and country Y, the only two countries in the world. Both countries produce just two goods, M and N.
Under which terms of trade will both country X and country Y benefit from trading with each other?

1 )
1M for 0.75N
1M for 0.8N
3 )
1M for 1N
4 )
1M for 2N
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