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3.(20 Points) Consider the following Ricardian model with unit labor requirements for two commodities (X and Y) and two countries (Home and Foreign) and

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3.(20 Points) Consider the following Ricardian model with unit labor requirements for two commodities (X and Y) and two countries (Home and Foreign) and the labor endowments: L Unit Labor Requirements =400 (home) L* = 360 (Foreign): Good X Y Home 10 20 Foreign 30 18 L*=360 (endowed labor) L=400 Home Country's Production possibility curve is depicted below left-side with its autarky point (A) at mid-point (X =20 and Y=10) and Foreign Country's Production possibility curve is depicted below right-side with its autarky point (A*) at mid-point (X* =6 and Y*=10): Y Yk 20 0 A 4/7 20 40 X 0 4* 14 12 X*

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