A

When a country changes from autarky to free trade in both imports and exports, what happens to the price of the import-competing good (P_m) and what happens to the price of the export good (P_x)?

Group of answer choices

Pm falls and Px falls.

Pm falls and Px rises.

Pm rises and Px falls.

Pm rises and Px rises.

b

Suppose that China (a very large country) begins to trade with Costa Rica (a very small country) after a period of autarky between the two nations. Will the free trade relative price be closer to China's autarky relative price or Costa Rica's autarky relative price?

Group of answer choices

It will be halfway between the two autarky relative price

China's

Costa Rica's

It is impossible to determine this from the information provided.