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Snowland has an absolute advantage over Aridzonia in the production of fish. Which of the following...

Snowland has an absolute advantage over Aridzonia in the production of fish. Which of the following is true about the impact of free trade on these nations?

The price of fish in Snowland will increase.

The world price of fish will be less than the price of fish in Snowland.

Producers in Snowland will decrease their production of fish.

Consumers in Aridzonia will purchase less fish.
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Answer #1

Snowland has absolute advantage in fish production over Aridzonia, implies snowland will produce fish and trade it with Aridzonia because there is free trade, Aridzonia will get fish from Snowland at less than their own price.

This will increase the demand for Snowland fish and lead to increase in the price of fish in Snowland.

So, the correct answer is an option (a).

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