By referring to section 1.1.3 of the lecture 4 notes (which I did not cover in class), briefly explain why a drop in the cost of trade between the 1980s and the 2010s caused an increase in international offshoring and in the relative demand for skill in both advanced and in other countries. Further, how did this drop in the cost of trade affect the wage skill premium in both country groups? Explain. The following questions are based on the commentaries by Edoardo Campanella and Michael Spence available on Courseworks. You may also refer to information available online. b) What is industrial policy? What objectives does industrial policy pursue beyond the achievement of (Pareto) efficiency? Is industrial policy becoming a widespread phenomenon or does it affect the U.S. only? Explain. c) Why did COVID and recent geopolitical events make governments and companies aware of the costs of long supply chains? The CHIPS and Science Act that was enacted in the U.S. in August 2022 consists of two bills: the Endless Frontier Act that incentivizes research and development in the U.S., and the CHIPS for America Act that pursues the return of semiconductor manufacturing in the U.S. or the reallocation of