Need help with c, d and e please!! Thank you

The Specific Factors Model: Suppose there are only two types of goods being produced in Peru: Vegetables and Plastic Cups. Suppose the Vegetables are produced with labor and land while the Plastic Cups are produced with labor and capital. Labor is the only factor of production that is mobile between industries. Suppose that Peru has a comparative advantage in the production of Plastic Cups.

(a) (2pts) If Peru opens its economy to trade, what will happen to its domestic production level and the price of Plastic Cups relative to Vegetables? (Briefly explain)

(b) (4pts) What will happen to the nominal wage rate of all workers in Peru? Show what happens with a dual labor market graph.

Comparative advantage occurs when a country can produce a good at a lower opportunity cost than another country.

Ans a) If Peru opens its economy to trade, it will produce more of the good in which it has a comparative advantage i.e PLatic Cups. It will produce for Domestic purpose as well as for export purpose.

As the quantity of Plastic Cups will increase in the economy as compared to Vegetables, price of Plastic Cups will decrease.

Ans b) It is ambiguous if the nominal wage rate will increase or decrease if Peru opens its economy. An increase in wages will be accompanied by an increase in price of a good and if the increase in price is more than the increase in wages, then the workers will not be better off.

(c) Using the graph in part (b) indicate how much the wage rate changed relative to the price.

(d) Can we conclude that workers are better-off as a result of Peru opening itself up to trade? (briefly explain)

(e) Who are the clear winners and losers when Peru opens itself to trade?