Question

Question 13

1 / 1 pts

The following cost data is for the mythical land of Painduvin where they produce nothing but bread and wine using only land and labor as inputs.

	1 unit of bread	1 unit of cheese
Labor Input	5 dollars	20 dollars
Land Input	4 dollars	10 dollars

If Painduvin were land-abundant, the opening up of free trade would cause the production of bread to __________ and the production of cheese to __________.

  

Fall; fall

   

Rise; rise

   

Rise; fall

   

Fall; rise

Answer 1

Labor land ratio Of bread= 5/4= 1.25

Labor land ratio of cheese = 20/10= 2

This means cheese is labor intensive and bread is land intensive.

Rise, fall - is correct