2. [15 points] Consider the Ricardian model of international trade with two countries, Iceland and China, and two goods,
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2. [15 points] Consider the Ricardian model of international trade with two countries, Iceland and China, and two goods, fish (F) and clothing (C). The table below displays unit labour requirements (how many units of labour are required to produce one unit of output) for the two countries. Iceland has 120 labour units and China has 1000 labour units. Unit labour requirements Iceland 3 1 Fish Clothing China 10 2 Draw the world fish-to-clothing relative supply curve. Make sure that you indicate kink points and explain each segment of the relative supply curve.