\text { U.S.: U(S,L) }=5 \cdot 6 L^{4} \text {. This makes } M U_{S}=.6 \frac{L^{4}}{S^{4}} \text { and } M U_{L}=.4 \frac{S^{6}}{L^{6}} \text { Canada: U(S,L)=S.4L }{ }^{.6} \cdot \text { This makes } M U_{S}=.4 \frac{L^{6}}{S^{6}} \text { and } M U_{L}=.6 \frac{S^{4}}{L^{4}} You'll find that there will be something a little strange about the free trade outcome.won't spoil the surprise. (Aren't you excited? Silly me, of course you're excited.) Beprepared.I a. In autarky, what is the U.S. consumption/production of S and L?For Canada? b. What is the autarky utility level for the U.S.?For Canada? c.When trade begins, which country will specialize in/export Lumber? d. Exactly what will Canada produce when trade begins? How much will it export to the U.S.? e. Will the U.S. be satisfied by Canadian exports? If not, what does that mean for the production in the U.S.? What must the world price of Canada’s export be? f. Now that we know what the price is of Canada’s export, how much of the import does it consume? What is Canada's post trade utility? g. What is the final trade outcome for the U.S.? Has the U.S. benefited from trade?Why or why not?Has the U.S. suffered from trade?

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