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9. Use the information in the table below to answer the following questions Unit labor requirement Home Foreign Food 100 Drinks 500 300 180 Suppose Homes labor supply is 1,000 hours, and Foreigns labor supply is 2,700 hours

(a) Draw the PPF for Home and for Foreign (on separate graphs). Put production of food on the x-axis. 5 (b) Which country has the comparative advantage in food production? Which has the comparative advantage in drink production? (c) Draw the world supply of food relative to drinks (the world relative supply curve) (d) Suppose that the PF ood = $2/pound, and PDrinks = $5/gallon. Draw new PPFs for Home and Foreign after trade is allowed. How can we tell that trade is welfare improving in both countries?

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