Hi, I really hope that you can help me with this question. I am currently studying for my upcoming exam, but this question remains a mystery to me. I tried multiple ways to calculate it, but my answer does not answer the question down below. Thank you in advance!

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.

	Home	Foreign
X (hours/unit)	2	3
Y (hours/unit)	1	0.5

But this changed due to the earthquake. A major earthquake in Foreign halves labour productivity in Foreign in both sectors. Home has a labour force of 100 hours and Foreign of 50 hours. I calculated that the values 2, 6 and 1/2 remain unchanged (in figure 1).

Question:

Explain how the situation described above gives rise to the values that are given in Figure 1 (so the 2, 6 and 1?2). (I figured this question out on my own)

A major earthquake in Foreign halves labour productivity in Foreign in both sectors.

--> 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 1?2? And discuss and explain the implications of the earthquake in Foreign for the distribution of the gains from trade between Home and Foreign.