The table given below shows the units of land and labor required to produce a unit of bread and cheese respectively in country X. If country X is land-abundant, the opening up of free trade would result in: $$\begin{array} { | c | c | c | }
\hline & \text { 1 urit of Bread } & \text { 1 unit of Cheese } \
\hline \text { Labor Input } & 5 \text { units } & 20 \text { units } \
\hline \text { Land Input } & 4 \text { units } & 10 \text { units } \
\hline
\end{array}$$
A)a decline in the production of both bread and cheese in the country.
B)an increase in the production of bread but a decline in the production of cheese in the country.
C)an increase in the production of both bread and cheese in the country but production of bread will rise at a lesser pace than the production of cheese.
D)a decline in the production of bread but an increase in the production of cheese in the country.

Question

The table given below shows the units of land and labor required to produce a unit of bread and cheese respectively in country X. If country X is land-abundant, the opening up of free trade would result in: $$\begin{array} { | c | c | c | } 
\hline & \text { 1 urit of Bread } & \text { 1 unit of Cheese } \
\hline \text { Labor Input } & 5 \text { units } & 20 \text { units } \
\hline \text { Land Input } & 4 \text { units } & 10 \text { units } \
\hline
\end{array}$$
A)a decline in the production of both bread and cheese in the country.
B)an increase in the production of bread but a decline in the production of cheese in the country.
C)an increase in the production of both bread and cheese in the country but production of bread will rise at a lesser pace than the production of cheese.
D)a decline in the production of bread but an increase in the production of cheese in the country.

Quizplus · Accepted Answer

Given that country X is land-abundant, it has a comparative advantage in producing goods that require more land relative to labor. The table shows that bread requires less land per unit of output compared to cheese (4 units for bread vs. 10 units for cheese). Therefore, with the opening of free trade, country X would specialize in the production of cheese, which uses its abundant resource (land) more intensively, leading to an increase in cheese production and a decline in bread production.

The Table Given Below Shows the Units of Land and Labor