Economics I dont know how to work these problems
Economics I dont know how to work these problems
Table 3-5
Assume that England and Spain can switch between producing cheese and producing bread at a constant rate.
Labor Hours Needed
to Make 1 Unit of Number of Units
Produced in 40 Hours
Cheese Bread Cheese Bread
England 1 4 40 10
Spain 4 8 10 5
Refer to Table 3-5. Assume that England and Spain each has 40 labor hours available. Originally, each country divided its time equally between the production of cheese and bread. Now, each country spends all its time producing the good in which it has a comparative advantage. As a result, the total output of cheese increased by
Selected Answer: c. 40.
Correct Answer: b. 15.
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