(2.A.) (10 points) Draw an \"Allocation of Labour\" gure similar to Figures 34 and 35 in the Feenstra textbook to depict and explain the eect of this shock on the real wage in units of each good and on the allocation of labour between the two industries. (2.B.) (10 points) Draw a production possibilities diagram with good A on the vertical axis and good M on the horizontal axis to depict the trading equilibrium before and after this shock. Use your diagram to illustrate the eect of the shock on output of each good, that this shock improves aggregate welfare in the country, and that it increases the size of the country's trade triangle. Wage Labor Value of marginal market product of labor equilibrium in agriculture Value of marginal product of labor in manufacturing Feenstra/Taylor, international Trade, Se (9 2021 Worth Publishers ; E \\ Manufacturing Agricultural labor Total labor supply labor FIGURE 3-4 Allocation of Labor Between Manufacturing and Agriculture The amount of labor used in manufacturing is measured from left to right along the horizontal axis, and the amount of labor used in agriculture is measured from right to left Labor market equilibrium is at pointA. At the equilibrium wage of W, manufacturing uses OML units of labor and agriculture uses DAL units. Wage Vertical distance = APM . MPLM PA . MPLA Feenstra/Taylor, International Trade, 5e @ 2021 Worth Publishers B AW PM . MPLM W A PM . MPLM OM L OA Ly- LA FIGURE 3-5 Increase in the Price of Manufactured Goods With an increase in the price of the manufactured good, the curve PM . MPLM shifts up to PM . MPLM and the equilibrium shifts from point A to point B. The amount of labor used in manufacturing rises from OML to OML', and the amount of labor used in agriculture falls from OAL to O AL'. The wage increases from W to W', but this increase is less than the upward shift APM . MPLM