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Respective goods in the respective countries

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Assume two countries--A and B-- and two goods--manufactured goods (M) and agricultural goods (G). Labor is the only variable input. It is assumed that (MPAM/MPBM)= 5 , (MPAM/MPBG) = 3, and (WA/WB) = 4 where W is the wage rate, MP is the marginal product of labor for the respective goods in the respective countries. Which country has the lowest marginal cost in manufactured goods? Demonstrate. Which country has the lowest marginal cost in agricultural goods? Demonstrate. [Hint: the trick is rearrange the above ratios in such a way as to end up with across country comparisons of MC = W/MP]

Reference no: EM131063741

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