1: Consider the 2x2 Ricardian Model. Let the following hold: MANUFACTURE AGRICULTURE LABOUR PRODUCTIVITY PRODUCTIVITY ENDOWMENT (output per (output per worker! worker! HOME 5 25 100 FOREIGN 6 18 200 NOTE: The data is in output per worker, not in workers per unit of output. (2 points) a) Draw each country's PPF. Label fully. Note that the data is in terms of output per worker and not as a unit input requirement. (2 points) b) Identify each country's opportunity costs. Interpret these in words. Relate to the PPF. (3 points) c) Who has the absolute advantage in Manufactures? AA in Agriculture? Who has the comparative advantage in Manufactures? CA in Agriculture? Identify who exports what. Discuss. (3 points) (I) Show that a reallocation of resources within each country can unambiguously raise world output in each sector. Explain the idea behind the potential Gains From Trade