To get the full credit, label each graph, indicate points where necessary, show your work.es 1. Ricardian trade model. There are two countries: Mali and Laos. Both of them have one factor of production, capital. Mali has 2200 units of capital and Laos has 1500 units of capital available. They use capital to produce two goods: rings and socks. In Mali, the unit capital requirement in rings production is 4, while in socks production it is 3. Laos's unit capital requirement in rings production is 5, while in socks production it is 1. 1. Graph Mali's PPF. Label, indicate intercepts clearly. 2. In Mali, what is the OC of rings in terms of socks? 3. In Mali, what would be the relative prices of rings in terms of socks in the absence of trade? 4. Graph Laos' PPF. 4 5. Assume countries trade. Graph world's relative supply. 6. If relative demand for rings is equal to 2/3 of relative prices of socks/price of rings, construct and graph the relative demand along the relative supply and find equilibrium prices. 7. Do countries gain from trade? Explain. 8. Using your words, explain the situation in Mali before the trade. How Mali decides what to produce before and after the trade with Laos. What is the welfare change for Mail with trade? Are there any income distribution problems? To get the full credit, label each graph, indicate points where necessary, show your work.es 1. Ricardian trade model. There are two countries: Mali and Laos. Both of them have one factor of production, capital. Mali has 2200 units of capital and Laos has 1500 units of capital available. They use capital to produce two goods: rings and socks. In Mali, the unit capital requirement in rings production is 4, while in socks production it is 3. Laos's unit capital requirement in rings production is 5, while in socks production it is 1. 1. Graph Mali's PPF. Label, indicate intercepts clearly. 2. In Mali, what is the OC of rings in terms of socks? 3. In Mali, what would be the relative prices of rings in terms of socks in the absence of trade? 4. Graph Laos' PPF. 4 5. Assume countries trade. Graph world's relative supply. 6. If relative demand for rings is equal to 2/3 of relative prices of socks/price of rings, construct and graph the relative demand along the relative supply and find equilibrium prices. 7. Do countries gain from trade? Explain. 8. Using your words, explain the situation in Mali before the trade. How Mali decides what to produce before and after the trade with Laos. What is the welfare change for Mail with trade? Are there any income distribution problems