Consider two countries (Home and Foreign) that produce two goods: wine (W) and cheese (C)

Consider two countries (Home and Foreign) that produce two goods: wine (W) and cheese (C). All assumptions of the Ricardian model hold. The two countries are engaged in free trade. Use the notation from the class, for example: Pw is the price of wine; a lc is Foreign's unit labor requirement for wine; etc. Use any appropriate figures to argue the following.
3. Show that the smaller the country is, in terms of its labor endowment, the more likely it is to completely specialize. Hint: consider the Relative Supply and Relative Demand figure. Take a country that is not fully specializing. How does the RS-RD figure look like in that case? Now start making that country's size smaller. How does that change the figure? Note that the RD does not change with country size, which affects output, therefore supply, but note demand. Hint: take the previous questions into account. As the country's size grows smaller, what is likely to happen to the world price ratio?