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If Country A's (PX/PY) in Autarky Is Greater Than the (PX/PY)

Question 18

Multiple Choice

If country A's (PX/PY) in autarky is greater than the (PX/PY) on the world market, then, as the country moves from autarky to trade, the relative price of good X facing A's producers will __________, and A's producers will hence want to shift their production toward producing __________.


A) decrease; more of good X and less of good Y
B) decrease; more of good Y and less of good X
C) increase; more of good X and less of good Y
D) increase; more of good Y and less of good X

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