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Could you help me? I have attached an image. 2. (10 points) Given is the standard 2-good, 2-country Ricardian model of international trade. Home has

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Could you help me? I have attached an image.

image text in transcribed
2. (10 points) Given is the standard 2-good, 2-country Ricardian model of international trade. Home has a labour force of 200 hours and Foreign of 100 hours. The unit labour requirements for X and Y are as follows: Home Foreign X (hours/unit) 2 3 Y (hours/unit) 1 1/2 Figure I below gives the world RS-curve belonging to this situation. It also depicts the world RD-curve, which is given by RD = 2/(*). Figure 1: P /P 6 RS 2 RD 1/2 a) (3 pts.) Explain how the situation described above gives rise to the values that are given in Figure 1 (so the 2, 6 and 's). A major earthquake in Foreign halves labour productivity in Foreign in both sectors. b) (3 pts.) Explain how this will change the position of the world RS-curve in Figure 1. Which numbers should be placed instead of 2, 6 and 's? c) (4 pts.) Discuss and explain the implications of the earthquake in Foreign for the distribution of the gains from trade between Home and Foreign

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