Consider the economy of Nauru. Nauru produces two goods: phosphate and fish. Suppose you know that the price of phosphate went from 10 pounds of fish per ton of phosphate to 20 pounds of fish per ton of phosphate when Nauru moved from autarky to free trade. What does this information tell you about the pattern of trade between Nauru and their main trading partner?

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The change in the price ratio of phosphate to fish from 10 pounds of fish per ton of phosphate to 20 ... View the full answer