1.     Consider a manufacturing firm using human capital at home to produce two inputs, ‘R & D’ and

1.     Consider a manufacturing firm using human capital at home to produce two inputs, ‘R & D’ and ‘components’. The firm combines the two inputs to produce computers. Draw the following on a diagram with ‘R & D’ on vertical axis and ‘components’ on horizontal axis.a.      The PPF of ‘R & D’ and ‘Components’.b.     Isoquants of computer production.c.      Show the closed economy equilibrium and label the computer output as 100d.     The firm discovered that they can buy ‘components’ cheaply from a foreign country, and decided to outsource part of the production of those rather than producing all of them at home.                                                             i.     What happens to the relative price of ‘R & D’ and ‘Components’.                                                           ii.     Show the change in a new diagram                                                         iii.     Show the level of output of computers                                                         iv.     Does the firm export ‘R & D”?