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In a particular country, there are two types of individuals: native (n) and foreigners (f). Each dedicates their 8 hours of labor to producing luxury

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In a particular country, there are two types of individuals: native (n) and foreigners (f). Each dedicates their 8 hours of labor to producing luxury (x) and non-luxury goods (y). Native workers' utility function is given by Un = x /3y /3 whereas foreigners' is given by U, = x /4y /4. Both individuals do not care whether they produce x or y. The production function for each good is given by x = 21 and y = 1, where I is the total labor devoted to the production of each good. What must be the price ratio, PX/p, be? Interpret your answer (4 points). b) Given this price ratio, how much x and y will foreigners and native workers demand? Interpret your answer (8 points). c) How should labor be allocated between x and y to satisfy the demand calculated in part (b)? Interpret your answer (3 points)

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