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Consider a world consisting of two countries, Freedonia and Sylvania

Consider a world consisting of two countries, Freedonia and Sylvania. Suppose that in Freedonia, 40 man-hours are required to produce each unit of clothing, and also 40 man-hours are required to produce each unit of food. In Sylvania, 10 man-hours are required for each unit of clothing and 20 man-hours are required for a unit of food.Question 2: (65 points)Two agricultural economies, Home and Foreign produce corn (C) and wheat (W ). Home has an endowment of 200 fields; each of Home field can produce either 2 units of corn or 2 units of wheat. Foreign has an endowment of 300 fields; each Foreign field can produce either 1 unit of corn or 2 units of wheat. Consumers in both economies have identical homothetic preferences. Writing D and D for the demand (consumption) of the two goods, the preferences are represented by the utility function: U(D; D ) = D D .

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