Steel is capital intensive and paper is labor intensive products. Germany and Poland have the same community indifference curves. AA is the PPF of Poland and BB is the PPF of Germany. Ft is free trade price ratio, Fb is pre-trade price ratio in Germany and Fa is pre-trade price ratio in Poland. Fill in the blanks and answer the questions according to graph.

a)Germany is ................. aboundant and Poland is...................... aboundant country. (5p)

b)In autarky, production point is .............. and consumption point is ............. in Poland. (5p)

c)In autarky, production point is ............... and consumption point is ............. in Germany. (5p)

d)After free trade, production point is .............. and consumption point is ............. in Poland. (5p)

e)After free trade, production point is ............... and consumption point is ............. in Germany. (5p)

f)After free trade, Poland specialized in producing ........... and production increased ............... units. (5p)

g)After free trade, Germany specialized in producing ........... and production increased ............... units. (5p)

h)After free trade, draw(on the graph) the trade triangles and show the import and export of paper and steel of both countries. (10p)

steel A H R C P E 12 11 N Et Eb Fa paper O M L A K B