Suppose that the assumptions of the Ricardian model are satisfied. The two

goods are food and manufactures. The home country needs 1 unit of labour to produce a unit

of food and 2 units of labour to produce a unit of manufactures. The foreign country needs 3

units of labour to produce a unit of food and 4 units of labour to produce a unit of

manufactures.

a. Assuming that both goods are consumed, what is the price of food relative to

manufactures (pf/pm) in each country prior to trade?

b. Which country exports food in free trade? Why?