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Please answer this question, options are in picture, too. Question 6 8 pts Suppose there are two countries in the world Canada and Adanac. Two

Please answer this question, options are in picture, too.

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Question 6 8 pts Suppose there are two countries in the world Canada and Adanac. Two goods are produced Homes (H) and Food (F) using only labour. Canada has 100 workers and Adanac has 200 workers.The average products of labour are constant in each country for each good. The following table contains the average product of labour (8: hence marginal product of labour) in each industry in each country. Food (F) Homes (H) Canada 4 6 Adanac 3 4 "As a result if international trade is based on absolute advantage then the result will be ' [Select] VI" Similarly, if "international trade is based on comparative advantage then the result will be ' [Select] Vl" If international trade is based on comparative advantage then as a result "social welfare will I [Select] Vl" Finally, suppose a domestic supplier in one of these countries is able to convince the government to impose a tariff on an item that is being imported (i.e. either food or homes), as a result the level of social welfare ' [Select] Vl" Food (F) Homes (H) Canada A 6 Adanac 3 4 "As a result if international trade is based on absolute advantage then the result will be [ Select ] Similarly, if "international trade is based on comparative advantage then the result will be [ Select ] Will fall for the exporting nation & rise for the importing nation This is uncertain & depends on the amount traded internationally en as a result "social welfare will Will fall for both countries all of these options are possible. es is able to convince the government to impose Will rise for the exporting nation & fall for the importing nation homes), as a result the level of social welfare [ Select ] Next O W X"As a result if international trade is based on absolute advantage then the result will be [ Select ] Similarly, if "international trade is based on comparative advantage then the result will be [ Select ] If international trade is based on comparative advantage then as a result "social welfare will [ Select ] [Select ] Fall in Canada; Rise in Adanac o impose elfare It depends on the terms of trade, it may go up or down in each country, but will rise for the world as a whole Rise in both countries (versus autarky) Rise in Canada; Fall in Adanac all of these options are possible. It depends on the terms of trade, it may go up or down in each country, but could rise for the world as a whole Next OCanada 4 6 Adanac 3 4 "As a result if international trade is based on absolute advantage then the result will be [Select ] Similarly, if "international trade is based on comparative advantage then the result will be [ Select ] [ Select ] Adanac will export both food & homes; Canada will do the opposite s a result "social welfare will Canada will export homes & import food; Adanac will do the opposite Canada & Adanac will not trade (food & homes) able to convince the government to impose Canada will export food & import homes; Adanac will do the oppositenes), as a result the level of social welfare Canada will export both food & homes; Adanac will do the opposite Next O WUct of labour) in each industry in each country. Food (F) Homes (H) Canada 4 6 Adanac 3 4 "As a result if international trade is based on absolute advantage then the result will be [ Select ] [ Select ] Canada & Adanac will not trade (food & homes) tage then the result will be Canada will export food & import homes; Adanac will do the opposite Adanac will export both food & homes; Canada will do the opposite is a result "social welfare will Canada will export homes & import food; Adanac will do the opposite Adanac will import both food & homes; Canada will do the opposite Finally, suppose a domestic supplier in one of these countries is able to convince the government a tariff on an item that is being imported (i.e. either food or homes), as a result the level of social w Select 1

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