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3. Consider a standard 2-country 2-product Ricardian model. Suppose the Home country has a comparative advantage in wine and the Foreign country has a comparative

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3. Consider a standard 2-country 2-product Ricardian model. Suppose the Home country has a comparative advantage in wine and the Foreign country has a comparative advantage in cloth, as we did in class. They specialize completely and trade with each other. If now the Home country takes measures to improve its labor productivity in cloth with the aim of catching up with the Foreign country in its comparative disadvantage industry. Analyze the potential effects on the Home country's welfare

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