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The following table shows the number of days of labor required to produce 1 unit of output of X and Y in Country A and

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The following table shows the number of days of labor required to produce 1 unit of output of X and Y in Country A and B. X Y Country A 100 days 4 days Country B 60 days 3 days (a) Calculate the autarky price ratios. (2 marks) (b) Which country has a comparative advantage in X and which country has a comparative advantage in Y? Explain why? (2 marks) (c) If the terms of trade are 1C: 22W, how many days of labor does Country A save per unit of its import good by engaging in trade? How many days does Country B save per unit of its import good? (2marks) (d) If the term of trade are 1C:24W, how many days of labor do Country A and B each save per unit of their respective import good? (2 marks) (e) What can be said about the comparative distribution of the gains from trade between Country A and B in part d) and part c)? Why? (2 marks)

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