A small open economy produces two goods: machines ( M ) and food ( F ) under CRS. Production of machines requires labour ( L m ) and capital ( K ) , while the production of food requires labour ( L f ) and land ( T ) . All other standard assumptions of the Specific Factors Model are satisfied. (a) Analyse graphically what happens to employment and output in both sectors when the land area in the production of food increases. How will that affect the rewards to all factors of production? (b) Suppose the world price of machines increases. Analyse graphically what happens to employment and output in both sectors and how will that affect the tewards to all factors of production..