Assume that Home and Foreign produce only two goods - computers and cars. Home has 720 units of labour available. In Home, the unit labour requirement in computers production is 8 and in car production it is 12. On the other hand, Foreign has 960 units of labour available. Foreign's unit labour requirement in computer production is 6, while in car production it is 24.

1. What is the free-trade equilibrium relative price of Computers?
2. Suppose that the number of workers increases from 720 to 840 in Home. Find the new equilibrium relative price.
3. Suppose that Home has now 840 workers, but they are only half as productive in both industries as we have been assuming. Consider Foreign to have the initial 960 workers only and the same productivity in both industries. Construct the world relative supply curve and determine the equilibrium relative price.