Home has 1200 units of labor available. It can produce two goods, apples and bananas. The unit labor requirement in apple production is 3, while in bananas production it is 2. There is now also another country, Foreign, with a labor force of 800. Foreign’s unit labor requirement in apple production is 5, while in bananas production it is 1. d) Describe the pattern of trade. Home country should produce? Foreign country should produce? Why? e) Show that how both Home and Foreign country gain from trade.

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