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1.              The table below (used in your previous problem set) shows bushels of wheat and the...

1.             

The table below (used in your previous problem set) shows bushels of wheat and the yards of cloth that the United States and the United Kingdom can produce with one hour of labor time under four different hypothetical situations.

Case A

Case B

Case C

Case D

US

UK

US

UK

US

UK

US

UK

Wheat

(bushels/man-hour)

4

1

4

1

4

1

4

2

Cloth

(yards/man-hour)

1

2

3

2

2

2

2

1

Assume that the data in Case Babove refer to millions of bushels of wheat and millions of yards of cloth.  

a) Plot the production frontiers of the United States and the United Kingdom.

b) What is the relative (autarky) price of wheat (i.e. Pw/Pc) in the U.S. and in the U.K.?

c) What is the relative (autarky) price of cloth (i.e. Pc/Pw) in the U.S. and the U.K?

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