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The following graph depicts Home country's production possibility frontier (PPF), and indifference curves before and after trade. Home has two industries: agriculture and manufacturing. The

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The following graph depicts Home country's production possibility frontier (PPF), and indifference curves before and after trade. Home has two industries: agriculture and manufacturing. The output of agriculture and manufacturing industries are on the vertical and horizontal axis respectively. Determine the following: a. What is the pattern of trade and gain from trade? How can you tell that from the graph? (2 marks) b. What happens to the relative prices of agriculture and manufacturing goods after trade (compared with before trade)? How can you tell that from the graph? (3 marks) c. Can this graph be explained by the Ricardian model? Why or why not? (2 marks) d. Assuming that the PPF's intercepts on the vertical and horizontal axis are different, is it true that some factors of production must be immobile between (i.e. specific to) the two industries? Explain your reasoning. (3 marks) Minuet-run. a. Dmdnlmhlliq. a

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