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:

Verified
Correct Answer:
Verified
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