(1) Suppose Home can produce two goods, clothing (C) and wheat (W). It has a total labor supply of 6,000 units. The unit labor requirements for clothing and what are was follows: Unit labor requirements Clothing Wheat Home 30 40 (1 point). Let Qc and Qw be the quantities of clothing and wheat produced, derive Home's production possibility frontier (PPF) and graph it (You can place Qe on the horizontal axis, Qw on the vertical axis). (1 point) b. What is the opportunity cost of clothing in terms of wheat? (1 point). What and how much will Home produce when the relative price of clothing is 1, ie, Pc/Av = 12 (1 point) d. Do clothing workers or whent workers earn higher wages when the relative price of clothing is 0.75, he, Po/Rw = 0.757 (2) Home is described above. Now suppose there is another country, Foreign, which also has a total labor supply of 6,000 units. The unit labor requirements for two roods in Foreign are as follows: Unit Inbor requirements Clothing Wheat Foreign 20 60 (1 point) a Which country hrn absolute dintre over the other in wheat production Which his comparative advantage over the other in wheat production (2 points). What and how much will Home ud Foreign produce, respetively when the world relative price of clothing is 3. Le PC/A UT (2) Home is as described above. Now suppose there is another country, Foreign, which also has a total labor supply of 6,000 units. The unit labor requirements for two goods in Foreign are as follows: Unit labor requirements Clothing Wheat Foreign 20 60 (1 point) a. Which country has an absolute advantage over the other in wheat production? Which has a comparative advantage over the other in wheat production? (2 points) b. What and how much will Home and Foreiti produce, respectively, when the world relative price of clothing is 3, i.e., Pa/Pw = 3. (1 point) c. What is the range for the relative price of clothing in terms of wheat under free trade? (1 point) d. Suppose the world relative price of clothing in terms of wheat under free trade is 1/2, i.e., Pa/Pw 1/2. Describe the pattern of trade between Home and Foreign. (2 points) e. Show that both Home and Foreign gain from trade at Pc/Pw = 1/2.