2. (30 marks) Consider the Ricardian model of trade and, to answer the parts below, use the following table that describes how many units of labour are required to make one computer and one sack of rice. Suppose that both countries, North (N) and South (S) have 600 units of labour each. Labour required One computer One sack of rice In N 10 15 In S 40 20 a) Which country has a comparative advantage in computers? Which country has a comparative advantage in rice? Describe the pattern of trade. b) Show that if the relative price of computers is smaller than 2/3, then country N would produce only rice. Likewise, show that country N will only produce computers if the relative price of computers to rice was to exceed 2/3. c) What accounts for this "knife-edge" behaviour? Contrast it with the Heckscher- Ohlin model, where the production of both goods is consistent with a whole range of relative prices.