3: FREE TRADE:Suppose Home's production supply curve rises (eg shifts right/down)

(2 points)a)Show what happens to Home's ED-ES curve.Explain

(2 points)b)What happens tofree-trade prices, equilibrium output, consumption, and imports/exports in each country.Show in a diagram and explain.

(3 points)c)Does HOME surplus rise?Show and explain.EG identify what happens to consumer and producer surpluses in Home. Relate toTerms Of Trade.

(3 point)d)Does FOREIGN surplus rise?Show and explain.EG identify what happens to consumer and producer surpluses in Foreign. Relate to theTerms Of Trade.