8. (35%) Consider a Heckscher-Ohlin model with two countries (Home & Foreign), two goods (Cloth & Food), and two production inputs (L and K). In equilibrium (with free trade), the prices are Pc = 14 and PF = 8. At these equilibrium prices, the labor and capital requirements of producing one unit of cloth is ale = 2 and akc = 4. The labor and capital requirements of producing one unit of food is auf = 2 and af = 1. Numbers in the table below are factor endowments of each country. Home Foreign L 60 30 K 90 30 (A) (5%) Which country is labor abundant? Which country is capital abundant? (B) (5%) Which product is labor intensive? Which product is capital intensive? (C) (10%) What are the wage of labor (w) and interest of capital (r)? (D) (10%) What are the output levels of cloth and food in Home? In Foreign? (E) (5%) What products does Home export and import? How about Foreign