(2) Now suppose Foreign shares the same technology with Home (i.e., aic = akc = 2, akp = 2). The endowments of Foreign are given by: 1, ale = 4, Factor endowments Labor Capital Foreign 2,800 2,000 Two countries engage in free trade. The world relative price of clothing is given by Pc/Pp = 1/2 (1 point) a. Which country is relatively labor abundant and which capital abundant? (1 point) b. Describe the pattern of trade between Home and Foreign. (2 points) c. Show graphically the production and consumption of Home under free trade. (1 points) d. Do both Home and Foreign benefit from trade? If not, which country gets worse off? (1 points) e. Does everyone in Foreign benefit from trade? If not, which group (workers or capital owners) gets worse off? (1 point) I. In which country are wages higher? Arial 12th Factor endowments Labor Capital Home | 2,500 2,000 (2) Now suppose Foreign shares the same technology with Home (i.e., aic = akc = 2, akp = 2). The endowments of Foreign are given by: 1, ale = 4, Factor endowments Labor Capital Foreign 2,800 2,000 Two countries engage in free trade. The world relative price of clothing is given by Pc/Pp = 1/2 (1 point) a. Which country is relatively labor abundant and which capital abundant? (1 point) b. Describe the pattern of trade between Home and Foreign. (2 points) c. Show graphically the production and consumption of Home under free trade. (1 points) d. Do both Home and Foreign benefit from trade? If not, which country gets worse off? (1 points) e. Does everyone in Foreign benefit from trade? If not, which group (workers or capital owners) gets worse off? (1 point) I. In which country are wages higher? Arial 12th Factor endowments Labor Capital Home | 2,500 2,000