Assume a large labour abundant country under free trade conditions with the rest of the world.

(a) Using an appropriate diagram show the post-trade equilibrium production and consumption points for this country.

(b) Now assume that in this country a technological growth occurs in the sector that uses Labour intensively. Using the same diagram show the post-growth equilibrium production and consumption points. What happens to this country's production of Labour- intensive good as well its Capital- Intensive good? Explain.

(c) What happens to the volume trade between this country and the rest of the world as a result of this growth? Explain fully.

(d) What happens to the welfare of this country? Does this growth make the country better off ? Explain