Amount of wheat and clothing produces

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Reference no: EM136451

Q. Consider two neighboring island countries called Bertland and Ernamia. They each have 4 million labor hours available per week that they can use to produce wheat, clothing, or a combination of both. The table below shows the amount of wheat or clothing that can be produced using one hour of labor.

Wheat
(Bushels) Clothing
(Garments)
Bertland 4 5
Ernamia 6 3

Initially, before these countries begin trading goods; Bertland uses 1 million hours of labor per week to produce clothing and 3 million hours per week to produce wheat, while Ernamia uses 3 million hours of labor per week to produce clothing and 1 million hours per week to produce wheat. Assume there are no other countries willing to trade goods, so when there is no trade between these two countries, each country consumes the amount of wheat and clothing it produces.

Reference no: EM136451

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