Question 2 (5 points) Saved Suppose Canada and China produce two goods Solar Panels (S) and Corn (C). In 2017, One Chines worker was needed to produce one solar panel or ten corns whereas Canada could produce one solar panel or five corns by using just 0.1 worker. A. Suppose the world relative price of Solar Panel in terms of Corn (Ps/Pc) is 8. Which country has a comparative advantage in which good and what will be the production/trade pattern? (2 points) B. In 2020, the productivity of Chines labor has improved in terms of solar panels. Now one Chines worker can produce five solar panels or 10 corns. Suppose, the productivity of Canadian workers has not changes. What will be the world relative price (Ps/Pc) in 2020? (2 points) C. Some Canadians fear that China become more productive in Solar Panels (S) in 2020, the wages of workers in the Canada will fall. Should Canadian workers fear foreign competition for this reason according to the Ricardian model? Briefly explain why or why not. (Hint: compare wages, in terms of both goods, in 2017 and 2020.). (1 point) A. Becuase China can produce 10 corns with the price of 10, while only the price is only 8 for the solar panel. In this circumstance, China has the comparative advantage of corns by comparing with Canada. As a result, the production should be China can export the corn since it has comparative advantage of that. B. Relartive Price(Ps/Pc)=Price of Solar Panels/ Price of Corns =(5*8)/(10*1) =4 C