Consider a two-country, two-commodity model. The table given below shows the units of good X and good Y produced in country A and country B per labor hour. If country A transfers 1 labor hour from the production of good Y to the production of good X, total world production of good X will _____ by _____ units. $$\begin{array} { | c | c | c | }
\hline \text { Productivity } & \text { Country A } & \text { Courntry B } \
\hline \text { Good X } & 1.00 & 0.50 \
\hline \text { Good Y } & 0.20 & 0.70 \
\hline
\end{array}$$
A)increase; 1
B)decrease; 1.43
C)increase; 0.5
D)decrease; 0.7

Question

Consider a two-country, two-commodity model. The table given below shows the units of good X and good Y produced in country A and country B per labor hour. If country A transfers 1 labor hour from the production of good Y to the production of good X, total world production of good X will _____ by _____ units. $$\begin{array} { | c | c | c | } 
\hline \text { Productivity } & \text { Country A } & \text { Courntry B } \
\hline \text { Good X } & 1.00 & 0.50 \
\hline \text { Good Y } & 0.20 & 0.70 \
\hline
\end{array}$$
A)increase; 1
B)decrease; 1.43
C)increase; 0.5
D)decrease; 0.7

Quizplus · Accepted Answer

By transferring 1 labor hour from the production of good Y to good X in country A, the production of good X increases by 1 unit (from 1.00 units per labor hour), while the production of good Y decreases by 0.20 units. However, the question specifically asks about the production of good X, which increases by 1 unit.

Consider a Two-Country, Two-Commodity Model A)increase; 1 B)decrease; 1

Consider a Two-Country, Two-Commodity Model A)increase; 1
B)decrease; 1