Question: the standard trade model home and foreign have two factors...
The standard trade model. Home and Foreign have two factors of production, land and labor, with which they produce two goods, wheat and wine. Technology is the same in the two countries. Wheat is land intensive, and Home is land abundant. Graphically analyze the effects on the terms of trade and welfare of the two countries of the following:
(a) An increase in Home’s amount of land.
(b) An increase in Home’s labor supply.
(c) An increase in Foreign’s amount of land.
(d) An increase in Foreign’s labor supply.