Consider an economy with two s… Show more International Trade problem. I’m having issues with this, please help! Consider an economy with two sectors, high tech (H) and low tech (L), and threetypes of workers: scientists (S), managers (M) and blue-collar (B). S and B arethe specific factors of the H and L sectors, respectively. Managers can work inboth sectors. Workers cannot switch occupations (for example, a scientist cannotwork as a manager).The economy is endowed with 50 blue-collar workers, 10 scientists and 40 man-agers. PH and PL are prices of the H and L goods, respectively. wS, wM and wB represent nominal wages of each group of workers. (A) The production function in the H sector is: QH(MH, S) = SMh^1/2 Solve the firm’s profit maximization problem. What is the demand for managersin the H sector? (Since S is a fixed factor, firms in the H sector have to chooseM only).(B) The production function in the L sector is: QL(ML, B) = BMl^1/2 (C) Assume that the economy is closed and PL = 1 and PH = 10. What is thequantity of managers employed by each sector? Calculate wS, wM , wB, QH and QL. Calculate real wages for each group (for example, wS PH , wS PL and so on). (Hint: the difference between revenues and the total amount of wages paid to managersin a sector is the aggregate income of the specific factor used by the sector). (D) Suppose we open the economy to international trade. The international prices1 (which are taken as given by the home economy) are PL = 1 and PH = 15. In otherwords, we assume that the economy has comparative advantage at producing theH good and will export it. Calculate wS, wM , wB, QH and QL. What are the realwages of each group? (E) Compare real wages in the two scenarios. Which group is made better offby trade? Which group is worse off? (F) Political Economy Home country is a genuine democracy, which means thatif a policy is not supported by more than 50% of voters it is not approved. Inthis case, will the economy open to trade? Do democracies present a political biasagainst trade? (G) Political Economy If political representation increases with wealth/income,will trade be approved? (H) Political Economy According to Bernie Sanders ”America’s trade agreementsbenefit large multinational corporations and Wall Street, but are a disaster forworking families.” Discuss this quote based on what you learned about the specificfactors model. (I) Political Economy If Sanders is right, is trade prohibition the best policyto follow? • Show less