If country A’s (PX/PY) in autarky is greater than the (PX/PY) on the world market, then, as the country moves from autarky to trade, the relative price of good X facing A’s producers will , and A’s producers will hence want to shift their production toward producing .

So, if we are to solve this problem we will be looking at some explanations on some key words in the question above. I will be explaining two of the key words in the question and they are; autarky and world market.

When we say a country is in autarky we mean that the country does not require other countries in the ways they go about things especially trading in the country. A good example of a country in autarky is North Korea.

World market simply means the trading that has to do with international countries trading with one another.

So, as the PX/PY in the country A increases in autarky, as soon as they are in the world market and they meet another country, say country G which has lesser PX/PY than them, country A will have to export more of the product Y.

This will make the producers in country A to want to produce more of the the product or good Y and less of the product or good X.

If country A’s (PX/PY) in autarky is greater than the (PX/PY) on the world market, then, as the country moves from autarky to trade, the relative price of good X facing A’s producers will __________, and A’s producers will hence want to shift their production toward producing __________.

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If country A’s (PX/PY) in autarky is greater than the (PX/PY) on the world market, then, as the country moves from autarky to trade, the relative price of good X facing A’s producers will , and A’s producers will hence want to shift their production toward producing .