Consider a two-good, two-country economy.

Under autarky, Home takes 48 million of unskilled labor and 40 million of skilled labor to produce 8 million of apparel. Home takes 16 million of unskilled labor and 24 million of skilled labor to produce 4 million of plastics.

Home has 64 million unskilled workers and 64 million skilled workers. Foreign has 64 million unskilled workers and 80 million skilled workers.

17. Which good is unskilled-labor intensive? Which good is skilled-labor intensive?

18. Which country is unskilled-labor abundant? Which country is skilled-labor abundant?

19. State the trade pattern (i.e., which country exports which good?).

20. (a) Point A is the production point under autarky. Again, Home produces 8 million of apparel and 4 million of plastics under autarky. How many apparel and plastics does Home consume? (b) The relative price of apparel is 0.45 in Home under autarky. Draw the price line and indifference curve in the figure above.