exercises
1. Australia is land abundant; India islabor abundant. Wheat is land intensive relative to textiles. Graphicallydemonstrate the pre- and post-trade equilibria between these two countries.Find and label the trade triangles for each. Which factors gain and whichfactors lose when trade arises between these two countries? Explain carefully.
2. If Indian laborincreases, ceteris paribus, what will happen to the world trade?
If trade happens.The gainers are the Land owners in Australia,and the laborers in India. the losers are the land owners in india and the laborers in Australia
2. the world gain from cheaper textles