Referencing Styles : Open Find out the opportunity cost of cloth in terms of widgets in Foreign. 2. If these two countries trade these two goods in the context of the Ricardian model of comparative advantage, then find out the lower limit of the world equilibrium price of widgets in terms of cloth. 3. If these two countries trade these two goods with each other in the context of the Ricardian model of comparative advantage, then find out the lower limit of the world equilibrium price of cloth in terms of widgets. 4. Find out the opportunity cost of cloth in terms of widgets in Foreign. Question # 2….Absolute Advantage and Comparative Advantage: Discuss the concepts (theories) of absolute advantage and comparative advantage, highlighting the following issues: 1. Definition of each concept. 2. A numerical example on each concept. International Economics Dr. Fayq Al Akayleh 12 of 9Page 3. Explain briefly the gains from trade according to each theory. Question # 3…. Hickscher-Ohlin model "A country can either be labor-abundant or capital abundant but cannot simultaneously be both labor-abundant and capital abundant." Discuss with a numerical example. (Hints: Consider two countries like Saudi Arabia and China. Let L stands for labor and K for capital. Consider the Hickscher-Ohlin model to answer this question). Question # 4….Standard Trade Model Other things being equal, a rise in a country’s terms of trade increases its welfare. What would happen if we relax the ceteris paribus assumption, and allow for the demand law to operate internationally? (Hints: explain the effect of increasing terms of trade on exports value, demand for country’s exports is elastic).