Consider two countries, France and Germany which can both produce cheese (C) and beer (B). The fixed labor supply of France is L F = 150. Germany has a fixed labor supply of L G = 300. The unit labor requirement (the amount of labor used for one unit of output) for beer and cheese in France are given as a F B = 3 and a F C = 2. In Germany the unit labor requirements are known as a G B = 2 and a G C = 1. The representative households in both countries exhibit the same utility function. a) Explain, which country exhibits an absolute advantage in the production of cheese. b) Which country has a comparative advantage in the production of cheese? c) Depict the production possibility frontiers for both countries in an appropriate graph. d) What are the consumption and production amounts in autarky equilibrium? [Hint: Use arbitrary indifference curves to illustrate how the equilibrium is achieved.] e) How high is the relative autarky price of cheese in these countries, based on your chosen indifference curves? f) What kind of adjustments will take place (production, consumption) if the governments of France and Germany sign a free trade agreement? Give a qualitative explanation by using a graph, without taking specific numbers into account. [Hint: Use an import-demand and export-supply curve for your answer.]