Suppose that Fiji has an abundance of cheap labour and a comparative advantage in the production of mineral water. Let's assume Fiji applies and is admitted to the Pacific Agreement on Closer Economic Relations (PACER) Plus free trade agreement. In the short-run, the likely effect of this will be:

Select one:

a.Migration of mineral water workers from Fiji to the original PACER Plus countries.

b.A fall in non-mineral water employment across the original PACER Plus countries.

c.An increase in the wages of mineral water workers in Fiji.

d.An increase in demand for mineral water workers in the original PACER Plus countries.

Suppose that industry in the Pacific Agreement on Closer Economic Relations (PACER) Plus free trade agreement group of countries is generally more capital-intensive than sugar cane production in the PACER Plus group. As the production and processing of sugar cane shifts towards the new member state, Fiji, the likely outcome in the original PACER Plus group (in the short run) is:

Select one:

a.An increase in the price of sugar cane.

b.An increase in wages of sugar cane workers.

c.An increase in the overall level of unemployment in the original PACER Plus group.

d.Profits in non-sugar cane industries fall.