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If a Country's PX/PY in Autarky Is Less Than the PX/PY

Question 13

Multiple Choice

If a country's PX/PY in autarky is less than the PX/PY on the world market, then this country has a comparative advantage in the __________ good, and, if the country now engages in international trade and moves along its production-possibilities frontier, its
Production of the X good will __________.


A) Y; increase
B) Y; decrease
C) X; decrease
D) X; increase

Correct Answer:

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