! Only provide 5 and 6 answer A country is endowed with 15 units of capital, 20 acres of land and 100 laborers. Capitaland land are specific to the manufacturing and food sectors, respectively. Let the price offood be fixed at 1, and suppose that, in autarky, the price of manufactures is 3, while infree trade, it is 5. The marginal product of labor is given by the following functions:MPL = 60-1.5LMPL, =150-.5L,Questions:1)Which good does the country export? Explain.What fraction of the labor force is employed in manufacturing in autarky and in2)free trade?3)Suppose there is a laborer who always spends half of her wage on food and halfon manufactures. How much of each good will she consume in autarky and in free trade?How much of each good will be produced, in this country, in autarky and free4)trade?What is the percentage change in the real income of capital owners in terms of5)each good, as the country moves from autarky to free trade?What is the percentage change in the real income of land owners in terms of each6)good, as the country moves from autarky to free trade?

5) Percentage change of capital owners remains the same when they move from autarky to free trade in…

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Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter7: Nonlinear Optimization Models

Section7.3: Pricing Models

Problem 1P

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5) What is the percentage change in the real income of capital owners in terms of cach good, as the country moves from autarky to free trade? What is the percentage change in the real income of land owners in terms of each 6) good, as the country moves from autarky to free trade?