1. Explain how the relative prices of rugs and robots in autarky compare with the relative prices when Canada and India start to trade? In your answer explain which country will export/import which product? [4 marks]
2. Explain how both Canada and India would gain from trade in the scenario described above?

Answer rating: 100% (QA)

To explain how the relative prices of rugs and robots change when Canada and India start trading we need to consider the concept of comparative advant... View the full answer