Solved

In the Absence of Trade Between a Small Country and the Rest

Question 65

Multiple Choice

In the absence of trade between a small country and the rest of the world,product X costs 1/3 as much per-unit as does product Y in the small country.However,in the world market X and Y trade at equal prices.If trade were now made possible between the small country and the rest of the world:


A) the small country would adjust by importing X.
B) the small country would adjust by exporting X.
C) the small country would end up importing both Y and X from the rest of the world.
D) the rest of the world would not find it advantageous to trade with the small country.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions