BIG and BIG:Assume Home and Foreign have identical preferences but Home has relatively more Capital (K) than Foreign but proportionally less land (T).Suppose Home is 5 times larger than Foreign.

a)Show that Home has a largerGain from Tradethan in question 1.Explain. That is, Home prefers Foreign to be larger.

b)Explain why Foreign now has a greater incentive to impose import tariffs given its equal size.Relate their net gain to the Terms of Trade and the distortions the tariff induces.

c)What does the above imply about the willingness of big countries to enter a free trade agreements.Explain.That is, why are big countries more willing to have FTAs with other big countries than with small countries?