Use the information below to answer the questions that follow.

England appears to be relatively abundant in labor, but scarce in land. The U.S. appears to be relatively abundant in land, but scarce in labor.

It turns out that:

• Wheat requires more land than labor
• Cloth requires more labor than land

Question 1: In the short term, what will happen to the price of the goods under free trade (increase or decrease):

(a.) Cloth in the U.S: increases, Cloth in England: decreases | Wheat in the U.S: decreases, Wheat in England: increases

(b.) Cloth in the U.S: decreases, Cloth in England: increases | Wheat in the U.S: increases, Wheat in England: decreases

(c.) Cloth in the U.S: decreases, Cloth in England: decreases | Wheat in the U.S: increases, Wheat in England: decreases

(d.) Cloth in the U.S: decreases, Cloth in England: increases | Wheat in the U.S: decreases, Wheat in England: decreases

Question 2: In the long term, what will happen to the price of these factor inputs under free trade (increase or decrease):

(a.) Land in the U.S: increases, Land in England: decreases | Labor in the U.S: decreases, Labor in England: increases

(b.) Land in the U.S: decreases, Land in England: increases | Labor in the U.S: increases, Labor in England: decreases

(c.) Land in the U.S: decreases, Land in England: decreases | Labor in the U.S: decreases, Labor in England: increases

(d.) Land in the U.S: decreases, Land in England: increases | Labor in the U.S: increases, Labor in England: increases