Hi, Please answer this question and look at the graph to answer the question.

7. Transportation costs and comparative advantage The following graph shows a fictional world economy that consists of only two countries, Golikia and Bulvia. Both countries produce boats under increasing-cost conditions. Note that the left-hand part of the diagram is a mirror image of a standard supply-demand diagram, and therefore the supply and demand curves slope in directions opposite their usual directions. Golikia Bulvia 30 SG SB 27 PRICE OF BOATS (Thousands of dollars) 24 21 +18 15 12 DB 6 10 9 8 7 6 5 4 3 2 1 1 2 3 4 5 6 7 8 9 10 BOATSIn the absence of trade, which of the following statements is correct? Golikia and Bulvia are equally good at producing boats. O Golikia has the comparative advantage in production of boats. O Bulvia has the comparative advantage in production of boats. Now suppose both countries open up to international trade with each other. For each country, use the previous graph to compute the equalizing price, consumption and production at that price, and the quantity of exports and imports when there are no transportation costs. Enter these amounts into the rst two rows of the following table. Equalizing Price Consumption at Equalizing Price Production at Equalizing Price Exports Imports (Dollars) Without Transportation Costs Golikia Bulvia with Transportation Costs Golikia UH UH mm am i mm am i DU am i DU DD E Bulvia Now suppose that the per-unit cost of transporting a boat between Golikia and Bulvia is $6,000. For each country, use the previous graph to compute the equalizing price, consumption and production at that price, and the quantity of exports and imports when transportation costs equal $6,000. Enter these amounts into the last two rows of the previous table. Compare free trade in the absence of transportation costs with the case when transportation toss are included. Which of the following statements about how the trade between Golikia and Bulvia differs in the presence of transportation costs relative to trade when then are no transportation costs are correct? Check all that apply. C] Bulvia will produce more, consume less, and import less. C] Bulvia will produce less, consume more, and export less. C] Golikia will produce more, consume less, and import less. C] Golikia will produce less, consume more, and export less