Question 1 A small country opens up to trade Imagine there is a small country under autarky. It produces two goods, sweaters and trousers, using only labour and with constant marginal labour products. The marginal products of labour are such that the relative price of trousers under autarky is lower than the world market relative price of trousers. [a) Which product will the small country export when it opens up to trade, and which product will it import? Explain your answer describing the behaviour of firms and consumers. [b) Draw a suitable graph which responds to the following criteria: . Illustrate the autarky and free trade production and consumption points of this country. . Indicate the country's exports and imports. . Does the country gain from opening up to trade? Answer with a short sentence explaining how you can determine this from the graph. Do not forget to label all elements shown in your graph