In the figure below, AB is the production-possibility curve of Canada. The line PQ shows the price ratio of one bushel of wheat/bale of cotton. The international price ratio is 0.33bushels of wheat/bale of cotton as shown by the line RS. I₁ and I₂ are two of the community indifference curves of Canada. After Canada engages in free trade, it will:

Wheat (bushels) P 12 R I1 80 A S1i C1 60 - Co 50 S Q - -- B 25 65 85 Cotton (bales) Canada