For each of the following cases below determine the following:
(a) the relative price of S toT(Ps/PT) in each country before trade
(b) comparative advantage of each country
(c) the range of relative wage between country A and B:WA/(WB*E)
Labor hours required to produce S or T in country A and B:
Country A: S=6 T=2
Country B: S=15 B=12
2. Suppose that there are 20,000 hours of labor available in country A, and that 5 hours of labor are required to produce one unit of S, while 4 hours are required to produce one unit of T. Draw A's PPF and find its slope. What is the relative price of S to T (Ps/PT)?
3. Use the information in problem 2 plus the following additional data to graph A's trade triangle:
world relative price of S to T=2;
A’s imports of T=1000; Find A’s exports of S=?