Q. There is a country produces two goods, one agricultural, one manufactured, and is currently in autarky equilibrium. The country's PA/PM in the world market is higher than the PA/PM in the domestic market.

1. In this case, should this country trade and if so, which product should they export?
2. Is there any gains from the trade? (use PPF and IC to demonstrate)
3. How the levels of export and import quantities would change when the country put tariffs on imported goods? (use above graph to illustrate)
4. Does trade impacts on the nominal wage rate and real wage rate in this country? (use graph to explain)
5. How will real rental of capital and real rental of land would affected by trade?