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Suppose the economists working in the National Department of Planning of Colombia are considering trade deals with different countries: Argentina, Bolivia, Chile, Dominican Republic, and the European Union

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Suppose the economists working in the National Department of Planning of Colombia are considering trade deals with different countries: Argentina, Bolivia, Chile, Dominican Republic, and the European Union. Assuming that the only barriers to trade are tariffs (there are no shipping costs, no search costs), and trade deals would eliminate tariffs completely. Workers in Colombia can produce petroleum or coffee under Ricardian assumptions. Answer each question in no more than a sentence or two. a. If Colombia trades with Argentina, the relative price of petroleum will fall in Argentina. In which good does Colombia have a comparative advantage? b. If Colombia trades with Bolivia, output of coffee will fall in Colombia. In which good does Colombia have a comparative advantage? c. If Colombia trades with Chile, real wages in terms of petroleum will rise in Colombia. Is Colombia's autarky relative price for coffee higher or lower than Chile's? d. If Colombia trades with Dominican Republic, an increase in the world relative demand for coffee improves Colombia's terms of trade. In which good does Colombia have a comparative advantage, relative to Dominican Republic? e. If Colombia trades with the European Union, the traded relative price of petroleum is greater than the European Union's autarky relative price of petroleum. Which good does Colombia export?