# consumption combination

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1.1

The table below shows unit labor requirements for production of maple syrup and shoes in Squareland and Roundland.

Squareland Roundland

Maple Syrup (Hours per gallon) 4 6

Shoes (Hours per pair) 10 4

The opportunity cost of a pair of shoes in Squareland is _2.5____ gallons of maple syrup.

Please enter 1 digit after the decimal point.

Calculations: =10/4=2.5

1.2

The table below shows unit labor requirements for production of maple syrup and shoes in Squareland and Roundland.

Squareland Roundland

Maple Syrup (Hours per gallon) 4 6

Shoes (Hours per pair) 10 4

The opportunity cost of a gallon of maple syrup in Roundland is _1.5____ pairs of shoes.

Please enter 1 digit after the decimal point.

Calculations: =6/4=1.5

1.3

The table below shows unit labor requirements for production of maple syrup and shoes in Squareland and Roundland.

Squareland Roundland

Maple Syrup (Hours per gallon) 4 6

Shoes (Hours per pair) 10 4

Squareland has an absolute advantage in maple syrup_____, and Roundland has an absolute advantage in shoes _____.

A. Shoes; maple syrup

B. Neither good; both goods

C. Both goods; neither good

D. Maple syrup; shoes

The amount produced per hour for maple syrup is higher in Squareland and that for shoes in Roundland.

1.4

The table below shows unit labor requirements for production of maple syrup and shoes in Squareland and Roundland.

Squareland Roundland

Maple Syrup (Hours per gallon) 4 6

Shoes (Hours per pair) 10 4

Squareland has a comparative advantage in maple syrup_____, and Roundland has a comparative advantage in shoes _____.

A. Both goods; neither good

B. Neither good; both goods

C. Shoes; maple syrup

D. Maple syrup; shoes

The opportunity cost of producing maple syrup is lower in Squareland and that for shoes in Roundland.

1.5

The table below shows unit labor requirements for production of maple syrup and shoes in Squareland and Roundland.

Squareland Roundland

Maple Syrup (Hours per gallon) 4 6

Shoes (Hours per pair) 10 4

Trade between Squareland and Roundland can benefit:

A. Only Roundland

B. Only Squareland

C. Both countries if Squareland exports shoes and Roundland exports maple syrup

D. Neither Squareland nor Roundland

E. Both countries if Squareland exports maple syrup and Roundland exports shoes

The country will produce only those items in which they have comparative advantage and export to the other country. Squareland will produce maple syrup only and Roundland will produce shoes only.

2.1

Suppose Eastland and Westland are the only two countries in the world, and that each can use labor to produce silk or rice. Westland has 1,600 hours of labor, and Eastland has 800 hours of labor. Each country's unit labor requirements are shown in the table below. Assume that labor is the only factor of production.

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#### Solution Summary

This consumption combination is denoted.