H-o model with no factor substitution (16 points) consider the heckscher-ohlin model with the following characteristics:

1. two goods: x (with price px) and y (with price py)
2. two factors of production: labor (paid a wage w) and capital (with rental rate r)
3. in each country, the supply of labor is constant and equal to 400 and the supply of capital is constant and equal to 600
4. both labor and capital can move across sectors
5. there is no factor substitution in production
6. aki = 5, aky = 2, air = 1, and aly = 4.
a) draw the ppf for home. place qy on the vertical axis. label all axes intersects.
b) what is the highest relative price of y in which home would produce some units of x? for the remainder of this question, assume the relative price is such that both goods are produced in home.
c) find w and r in terms of px and py.
d) if y decreases, what does the stolper-samuelson theorem predict will happen to w and r? assume the relative price is at a level such that both goods are still produced.
e) a different country, foreign, has all of the same characteristics as home with one exception: foreign's supply of labor is equal to 600.
if home and foreign engage in trade, which country will export x?