If the autarky price of S were lower in country A than in country B then if trade were allowed ?
Correct answer: A. A would likely export S to B
- A. A would likely export S to B
- B. A would likely import S from B
- C. neither country would want to trade
- D. None of the above
Explanation
A lower autarky price of S in country A indicates that A can produce S at a lower opportunity cost than B. With trade, A would therefore tend to export S to B, while B would export the other good.
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