is The world relative supply and demand of apple and beer for domestic and foreign countries are given in the figure below. Pa and Pb represent the price of apples and bananas, respectively. Qa and Q, represent the quantity of apples and bananas in the domestic country, respectively. Qa and Q represent the quantity of apples and bananas in the foreign country, respectively. a La the unit labour requirement for apple in the home country. аb is the unit labour requirement for beer in the home country. aa is the unit labour requirement for apple in the foreign country, and ab is the unit labour requirement for beer in the foreign country. Answer questions (a), (b), and (c) with respect to the figure below. Relative price Pa/Pb ata/ab RD aLa/alb RS Qa + Qa Q₁ + Q₁₁ Relative quantity (b) [10 marks] At point 1, what will each country produce? Justify your answer. [20 marks] Consider now a decrease in the relative demand that causes RD curve to move to the left. List all possibilities that may occur and show in details the choice of each country. [Hint: consider all possible locations of the equilibrium relative price and discuss what each country will produce] (c) [10 marks] Which country has the comparative advantage in producing apple, and which country has the comparative advantage in producing beer? Explain why.