Give sound economic reasoning for each of your answers.

1. Refer to https://www.acer.org/au/teacher-india/free-articles/willparticipation-in-pisa-help-change-the-education-pattern-in-india India had decided to participate in PISA (Programme for International Student Assessment) from 2020. Assume India to be the Home country and the rest of the world (RoI) to be the Foreign country and that they are currently trading. In a Ricardian framework analyse how the model in the above problem and its results will change (post trade) if India gets to improve its rank in PISA. [Hint: Choice of the two sectors is crucial] 9

2. Assume that the total endowment of the Home country increases as a result of population growth. But at the same time the technology in the sector the goods of which the Home had been exporting, gets upgraded. Can the country lose its comparative advantage because of this? Is it necessarily a bad thing?