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There are two countries, Home and Foreign, and two goods, tradables and nontradables. Each country's consumption basket is a Cobb-Douglas aggregate over the two goods, with tradables expenditure share =1/2 : C=(CT)(CN)1 Output is produced using local labor, L, based on the following technologies: QT= ATL and QN=ANL in Home, and QT=ATL and QN=ANL in Foreign. Maintain the usual assumptions: (i) Labor is freely mobile between the two sectors within each country. (ii) Tradable goods are traded freely. Assume that Home has higher productivity than Foreign in tradables with AT=4AT. (a) Suppose that nontradables productivity is identical between the two countries so that AN=AN. Compute the relative price of nontradables to tradables in Home relative to Foreign, PN/PTPN/PT. (b) Suppose that nontradables productivity is identical between the two countries AN=AN. Solve for the aggregate price level in Home relative to Foreign, PP. (c) Suppose that in both countries the tradables expenditure share decreases to = There are two countries, Home and Foreign, and two goods, tradables and nontradables. Each country's consumption basket is a Cobb-Douglas aggregate over the two goods, with tradables expenditure share =1/2 : C=(CT)(CN)1 Output is produced using local labor, L, based on the following technologies: QT= ATL and QN=ANL in Home, and QT=ATL and QN=ANL in Foreign. Maintain the usual assumptions: (i) Labor is freely mobile between the two sectors within each country. (ii) Tradable goods are traded freely. Assume that Home has higher productivity than Foreign in tradables with AT=4AT. (a) Suppose that nontradables productivity is identical between the two countries so that AN=AN. Compute the relative price of nontradables to tradables in Home relative to Foreign, PN/PTPN/PT. (b) Suppose that nontradables productivity is identical between the two countries AN=AN. Solve for the aggregate price level in Home relative to Foreign, PP. (c) Suppose that in both countries the tradables expenditure share decreases to =