Please critically answer the following questions.

Question 1.1

"We generally expect to observe higher tariffs in final consumption goods' sectors and lower tariffs on inputs and intermediate goods sectors". Discuss this statement using the arguments from International Trade theory and protectionism, explaining which groups will gain and loose because of the tariffs in the different types of sectors, and the possible differences in their lobbying power

Question 1.2

"Consider two countries producing the same good with the same constant returns to scale production function, relating output to homogeneous capital and labor inputs. ... the Law of Diminishing Returns implies that the marginal product of capital is higher in the less productive (i.e., in the poorer) economy. If so, then if trade in capital good is free and competitive, new investment will occur only in the poorer economy, and this will continue to be true until capital-labor ratios, and hence wages and capital returns, are equalized." (Robert E. Lucas, American Economic Review, 1990). Within the set-up of Lucas' statement - output produced by capital and labor with constant returns to scale and the same technology being accessible to all countries - how can our models of international trade explain why capital flows do not occur the way Lucas argues they should? - Critically analyse and answer this statement with strict reference to the International Trade Theories.