Consider a Heckscher-Ohlin Model: suppose 2 economies, France and Holland, produce fresh-cut flowers, tulips and roses, using land and labor. Tulips are land intensive and roses are labor intensive. France is abundant in labor and Holland is abundant in land.

(1) Under Holland-France free trade, which country exports tulips, and which country

exports roses?

(2) What happens to the relative price of roses in France and Holland? Explain your answers verbally or graphically.

(3) Illustrate that France gains from trade using a picture with the PPF.

(4) In Holland, will workers support the Holland-France free trade? What about landowners? Why or why not?

(5) Are the workers' and landowners' attitudes towards free trade affected by which industry they work for? Explain your answers verbally.