3. Capital/Labor Capital Endowment Labor Endowment (Billion 1966 $ Country (Billion 1966 $) (1,000 Persons) Per 1,000 Persons Philippines 6.597 12,470 0.53 United States 785,933 76,595 10.26 Source: Harry P. Bowen, et al., "Multicountry, Multifactor Tests of the Factor Abundance Theory," American Economic Review, December 1987, pp. 806-807. (a) Define factor abundance. According to the data in the above table, which country is labor abundant? Which country is capital abundant? (b) The first diagram below represents the autarky and after-trade position of Philippines. The second diagram show the autarky and after-trade position of the US. Based on these diagrams: (i) Indicate the autarky points of production and consumption of Philippines (use the given letters). (ii) Indicate the autarky points of production and consumption of the US. (iii) Indicate the points of production and consumption of Philippines after trade. (iv) Indicate the points of production and consumption of the US after trade. Which country has comparative advantage in the production of clothing? (vi) Which country has comparative advantage in aircraft production? (vii) Reproduce these diagrams including the domestic price ratio (Pclothing / Paircraft) for cach country