Question: This problem uses the data from problem 9, and the graphs you drew in problem 10. Suppose that the terms of trade end up at

This problem uses the data from problem 9, and the graphs you drew in problem 10. Suppose that the terms of trade end up at 4 tons of wool for 1 hand knotted rug. Suppose, too, that New Zealand decides to export 12 million tons of wool to India.

a. How many rugs will New Zealand import from India?

b. What will be New Zealand’s consumption of each good after trade?

c. What will be India’s consumption of each good after trade?

d. On the PPFs you drew for problem 10, plot each country’s consumption point after trade. Label it C for New Zealand, and C' for India.

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