Draw two sets of axes, one for Nation 1 and the other for Nation 2, measuring labor along the horizontal axis and capital along the vertical axis.
(a) Show by straight lines through the origin that K/L is higher for commodity Y than for commodity X in both nations in the absence of trade and that K/L is higher in Nation 2 than in Nation 1 for both commodities.
(b) What happens to the slope of the lines measuring K/L of each commodity in Nation 2 if r/w rises in Nation 2 as a result of international trade?
(c) What happens to the slope of the lines measuring K/L in Nation 1 if r/w falls in Nation 1 as a result of international trade?
(d) Given the results of parts b and c, does international trade increase or reduce the difference in the K/L in the production of each commodity in the two nations as compared with the pretrade situation?