Use the following information for Questions 5 through 8. In a two country, two good Ricardian model the size of the labour force and the unit labour requirements are provided in the following table: Foreign Home L = 1200 labour L* = 800 Apples aLA = 3 Bananas aLB 2 azA=5 aLB = 1 Question 5 Foreign's marginal product of labour in the production of Apples is: O 3 O 1/5 01 05 1 pts Question 6 The free-trade equilibrium price of Apples will fall between 3/2 and 5. O will be greater than 5. O will not depend on the relative demand for Apples. O will be less than 3/2. 1 pts Question 7 The free-trade equilibrium relative wage: w/w* will O will be greater than 2. will fall between 1/2 and 5/3. O will be less than 1/2. O will not depend on the relative demand for Apples. 1 pts Question 8 1 pts The relative demand for Apples is described by the equation: 1 PA RD = 4/ =1-1 8 PB What is the largest value of the relative demand for Home Labour (relative to Foreign Labour) when the relative wage is W ? 3/2 27/16 3/8 O 1/2 || Use the following information for questions 9 through 11. For the following 3 questions, use the information provided in the table concerning the production of Bicycles (B), Guitars (G), Monitors (M) and Umbrellas (U) in two countries (Home and Foreign) using Labour (L). Consumers in both countries like to consume all 4 goods. Home Foreign Good (aLi) (aži) B 10 6 G 6 5 M 12 5 U 3 Question 9 PM PG In autarky in the foreign country, the price of a Monitor relative to a Guitar, will be: O less than the Home autarky relative price of a Monitor measured relative to any of the other three goods (B, G or U). PM O less than the Foreign autarky price of a Monitor relative to a Bicycle, PB O less than 1/4. PU PB O less than the Foreign autarky price of an Umbrella relative to a Bicycle, 1 pts Question 12 1 pts In the Specific Factors model a country produces two goods: Alcohol (A) and Bread (B). The production of Alcohol requires the use of two factors of production: Labour (L) and Capital (K). The production of Bread requires the use of two factors of production: Labour (L) and Land (T). Capital and Land are fixed and specific to Alcohol and Bread industries respectively. The total amount of Labour is fixed but Labour is freely mobile between the two industries. Production of both goods exhibits diminishing marginal productivity of Labour. If the price of Bread increases and there is no change to the price of Alcohol then we would expect to observe: O an increase in wages in both industries along with increased employment in the Bread industry and decreased employment in the Alcohol industry. O a decrease in wages in both industries along with increased employment in the Bread industry and decreased employment in the Alcohol industry. a decrease in wages in both industries along with decreased employment in both industries. an increase in wages in both industries along with decreased employment in the Bread industry and increased employment in the Alcohol industry.