5. (20 points) Consider two open economy countries (Country A and B), two goods (one tradable (T), and a nontradable(N)). Countries A and B have the following production functions for tradable and non-tradable goods: YA = ZLIKE- -a -a YB = LK- YA = LK- Y =LK- 1-a Where Z>1. (a) (5 points) Derive the marginal product of labour (MPL) for countries A and B for both types of goods. Demonstrate the MPL for tradable goods for country A is larger than country B. (b) (5 points) Now given the prices for the tradable goods in each country (PA and PF) and the prices for the non-tradable goods in each country (P and PB) and recall the law of one price, demonstrate how wages in Country A are greater than wages in country B. (c) (5 points) Now demonstrate that PA is greater than PB. (d) (5 points) Explain the intuition behind this outcome. 5. (20 points) Consider two open economy countries (Country A and B), two goods (one tradable (T), and a nontradable(N)). Countries A and B have the following production functions for tradable and non-tradable goods: YA = ZLIKE- -a -a YB = LK- YA = LK- Y =LK- 1-a Where Z>1. (a) (5 points) Derive the marginal product of labour (MPL) for countries A and B for both types of goods. Demonstrate the MPL for tradable goods for country A is larger than country B. (b) (5 points) Now given the prices for the tradable goods in each country (PA and PF) and the prices for the non-tradable goods in each country (P and PB) and recall the law of one price, demonstrate how wages in Country A are greater than wages in country B. (c) (5 points) Now demonstrate that PA is greater than PB. (d) (5 points) Explain the intuition behind this outcome