Given :

a. graphically show and discuss the trade pattern between the two countries using the excess demand function for Good Y.

b. algebraically show who are the gainers and losers in Country F with free trade.

c. Graphically show the over-all welfare implication to Country H of engaging in free trade.

d. discuss a scenario where an increase in the available supply of capital in Country F, cet.

par., can lead to a: a decrease in the volume of trade with Country H. And change in the pattern of trade with Country H.

e. graphically show that doubling the available supply of capital in Country H, cet. par., will lead to higher volume of trade with Country F.

Consider the following H-O model assumptions in answering the questions below: Two goods: i = X, Y Two inputs: L and K (fixed at a given time and industry-mobile w/in the country) Two countries: j = H, F X) = f (LK) Y = fy(Ly, Ky) ; j = H,F Same technology in both countries Good X is labor-intensive and Good Y is capital-intensive CRS production functions and PCM Identical and homogeneous tastes in all countries The absence of distortions Factor endowments of countries differ as given below: " = 10 ;K" = 20 ;I" = 20 ;K" = 30 Consider the following H-O model assumptions in answering the questions below: Two goods: i = X, Y Two inputs: L and K (fixed at a given time and industry-mobile w/in the country) Two countries: j = H, F X) = f (LK) Y = fy(Ly, Ky) ; j = H,F Same technology in both countries Good X is labor-intensive and Good Y is capital-intensive CRS production functions and PCM Identical and homogeneous tastes in all countries The absence of distortions Factor endowments of countries differ as given below: " = 10 ;K" = 20 ;I" = 20 ;K" = 30