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) (10pts) Neoclassical Model (cont.): Assume that a country produces and consumes two goods, food and computers and is in equilibrium in autarky. It now

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) (10pts) Neoclassical Model (cont.): Assume that a country produces and consumes two goods, food and computers and is in equilibrium in autarky. It now finds that it can trade at international prices where (P food /P computers ) on the world market is greater than (P /P computers in the domestic market. (a) (2pts) If this country decides to engage in international trade what good should it export and why? (b) (2pts) To what extent should it specialize in the production of the good to be exported? (c) (2pts) How and why would your answer to part (b) be different under the assumptions of the Classical Ricardian model? (d) (4pts) Draw a fully labeled graph showing the autarky equilibrium, the degree of specialization, the consumption possiblility frontier, the optimal consumption bundle, the utility gain from trading, and the quantity of exports and imports

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