Use the 'Standard Model of Trade"egthe Relative demand -relative supply framework in the following.Assume that Land is specific to AG and Capital is Specific to MANU.

Autarchy versus FreeTrade:Suppose Home and Foreign have identical preferences butHome has more land(T)than foreign.Otherwise, they have the samelabourand capital endowment.

a)Depictthis in the 'standard model of trade' as per class notes.Explain why relative demandsand/or relative supplieswill differ and how.

b)Compare prices, production,and consumption in each country in autarchy.Who has the lower relative price of manufacturing (PM/PA)?explainwhy (egintuition).

c)What happens to prices,production,and consumption in each country when we open to freetrade?Who exports AG?Who exports MANU?Explain.Relate this to changes in (PM/PA) in each country

d)Do we getGains from Trade?Who gains? Do some lose? Explain.Give the intuition.

e)Will Land owners in HOME support free trade?Explain.