1. The following table which shows the amount of output that each unit of labor can produce in the France and Spain.

FranceSpain

Bananas (B)1020

Wine (W)3030

(a) Other things equal, which of the following terms of trade would France prefer, 1B = 1.75W or 1B = 2.5W?Show your work and explain.

(b) Provide two changes (factors) that would cause the terms of trade for France to improve. Be sure to explain.

3.In the case below, explain carefully the effect [increase (+); decrease (-); in determinant (ind)] upon equilibrium price (P) and equilibrium quantity (Q). Feel free to illustrate the changes graphically. Where you believe the effect is in-determinant, be sure to explain.

Car industry in the U.S.: COVID-19 forces more people to work from home and, at the same time, automobile companies suspend production at some of their factories due to the pandemic.