Question

Suppose that in the United States 4 worker-hours are required to produce each unit of clothing...

Suppose that in the United States 4 worker-hours are required to produce each unit of clothing and each unit of food. In Canada, 1 worker-hour is required for each unit of clothing and 2 worker hours are required for a unit of food. Show your work.

A. Assuming that each country has 40 worker-hours of labor available for production, draw the production possibilities frontiers for each country. What do the slopes of these frontiers indicate? (Place Food on the Vertical axis.)

B. Draw the world production possibilities frontier (defined as the maximum amount of goods that can be produced worldwide for a fixed amount of resources). What does its slope indicate?

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