1. Show that when D6 = 11 then cf:V = nee: = 1 111.1111:V =11=I = 1. PT = 1111.11\" = 1/21. H1111: Follow these steps: Use the fact that yil': CN to conclude that 1193:1121. Find a similar expression for e: by assuming that all tradeables are consumed locally. Take the ratio of def/be: and use e: + 12:"- = 1 to nd the labor allocation. 11391310? Plug back into the production functions to nd yf, yf. Calculate PT P\" using the expressions for C- 'V, CT. C C \"S21 F\" Calculate wages 11131.11}?! by equating the wage to the marginal product of labor. 2. Now consider a case where there are differences in demand across counties: Dc = 1 (1.: where D 0 are productivity parameters. Consumers County chas De units of expenditures consuming C. of the nontradeable good and Ce of the tradeable one. Consumers split these expenditures between tradeable and non-tradeable goods in the following way: PNCN = QD., PTC? = (1 - a) De where 0 _ CT