c) (3) Determine the autarky (pre-trade) relative prices () i.e. the price of a television (X) in units of computer (Y) in each country? d) (4) Complete the following table. Units of labor required to produce Opportunity cost of producing 1 unit of television (X) computer (Y) X Y Mexic 12 8 U.S. 6 6 e) (4) What country has comparative advantage in X? in Y? Explain. f) (4) Suppose that each country has 120 hours of labor available. Draw the PPF for each country and determine its slope. g) (2) Under the assumption in f) and the assumption that each country would like to consume equal number of televisions and computers, how many televisions and computers will be produced and consumed per year in each country if there is no trade? (hint: You need to solve a system of equations.) h) (4) If Mexico and the U.S. form a free trade area, in what range would the terms of trade (that is, the price of a television (X) in units of computer (Y) under free trade) have to fall? Why? The Heckscher - Ohlin Model 26. (7.5) Consider the following data on the factor endowments of two countries, A and B: Countries A B Labor Force (millions of workers) 45 20 Capital Stock (thousands of machines) 15 10 a) Which country is relatively capital abundant (1.5) ? Explain (1.5) b) Which country is relatively labor abundant (1.5)? c) Suppose that good 5 is capital intensive relative to good T. Which country will have comparative advantage in the production of 5 (1.5)? Explain (1.5)