Question: 3. (20 points) Heekscherthlin model: Suppose that there is a small country called Holbox. The following table contains the consumption and production allocations, and input

 3. (20 points) Heekscherthlin model: Suppose that there is a small

3. (20 points) Heekscherthlin model: Suppose that there is a small country called "Holbox". The following table contains the consumption and production allocations, and input use of each of the goods before and after freetrade: _m- We Production of good X 1130 units 50 units Consumption of good X 100 units 200 units Capital used to produce good X 150 units 100 units Labor used to produce good X 50 hours 25 hours lrrm m Based on the infomration provided. answer the following questions: (a) How many units of what product are exported? How many units of what product are imported? (2 points} (b) Compute the free-trade relative price of good X. (5 points) {c} Is this country labor-abundant or capital abundant? Clearly justify your answer. (5 points) (d) Has the real wage measured in terms of good Y increased or decreased after trade? Justify your answer. (4 points) (e) Has the real rental rate measured in terms of good X increased or decreased after trade? Justify your answer. {4 points)

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