Question 1: FREE TRADE - Two Country Model .................. 20 points HOME + WORLD ES/ED ~ P . FOREIGN ~ D Q Q traded Q + (4 points) (a) Show and explain how derive the free trade world price. Then show how output and consumption in each country changes as we move to free trade.~ WORLD PRICE: ~ HOME (Q , Q"): ~ FOREIGN (Q , Q"): (4 points) (b) Show and explain how social surplus in each country changes as we move to free trade. Give the details and the intuition. ~ HOME: + FOREIGN + Now suppose the SUPPLY curve in FOREIGN rises (eg moves down/ to the right) ~