Country A can produce either 1000 units of good X or 2000 units of good Y if it uses all its resources and costs are constant. Currently, Country A doesn't trade and consumes 500 units of good X and 1000 units of good Y.

A. Draw country A's production possibilities frontier.

B. Illustrate country A's autarky equilibrium

C. If country B offers to trade good X and good Y with country A at PX/PY = 3. Would country A trade with country B? Why, or why not?

D. Country C offers to trade good X and good Y with country A at a price ratio of 1. Show that, even if country A continues to produce 500 units of good X and 1000 units of good Y, residents of country A would be better off if they exchanged with country C. Would country A export good X or good Y? Would country A import good X or good Y?

E. Compared with part (d), how would the amount of trade exchange if country A specialised its production according to comparative advantage? Would country A specialise in good X or good Y? Would the country specialise partially or completely?