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please help me with this question Consider a model of trade between the USA and Europe, in which the only resources are labor (L) and

please help me with this question

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Consider a model of trade between the USA and Europe, in which the only resources are labor (L) and capital (K). The USA has 160 million identical workers, and $15 trillion worth of generic capital stock. Europe has 200 million identical workers, and $25 trillion worth of capital stock. Each country produces only machine tools (X) and designer clothing (Y) under perfect competition, and each sector uses both L and K with constant returns to scale and diminishing marginal returns, since L and K are not perfect substitutes. Machine tools are relatively capital- intensive. Assume factor productivity and consumer preferences are internationally identical. a. Based on this information, which country is abundant in which factor? b. In two separate diagrams, graph the PPFs for both countries, with X on the horizontal axis. Use an iso-value line to show a typical production point for each country and call it point A. c. Assuming the USA and Europe only trade with each other, use the graphs in part "b" to show how free trade can affect the iso-value lines through change in relative prices. Explain how opening to trade can affect the production of each good in each country and label the new production point as B

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