Consider a two-country, two-goods world. Trade is based on comparative advantage. You are given the following information (which applies to the whole question, unless otherwise stated):

One labour can produce 25 vaccines (V)orproduce 50 masks (M) in Home (H); while one unit of foreign labour can produce 20 bottles of vaccinesor40 masks.

The labour endowment in Home is 400, which is one-hundred units less than Foreign.

The free-trade relative price of vaccines is the average of the countries' autarky relative prices.

Both countries agree to trade 3400 vaccines.

Note: Keep your answer to 2 decimals places if needed.

a) Is there any gain from trade? Yes/No, explain. (5 points)

b) Suppose a new production technology is available for masks such that the level of productivity increases by 10% in Foreign. Compute the free-trade relative price of vaccines. Find the production and consumption bundles for Home. (5 points)

c) (Continued from part b) Suppose the new production technology for masks isalsoavailable to Home such that the level of productivity increases by 6% in Home. Redo part (b). (5 points)

d) Show your answers in parts (b) & (c) in a well-labelled diagram (label vaccines on the horizontal axis). Also, remember to identifyHome'slevels of exports and imports, and label the slopes of the PPFs and budget constraints. No need to show both written explanation and indifference curves. (15 points)