$\text { Table } 55 \text { a }$
$\begin{array}{l}
\text { Units of output produced by } 1 \text { hour of labor input }\
\begin{array}{|l|l|l|}
\hline \text { Commodity } & \text { Canada } & \text { Mexico } \
\hline \text { Bread } & 6 \text { loaves } & 2 \text { loaves } \
\hline \text { Cheese } & 8 \text { punds } & 4 \text { pounds } \
\hline
\end{array}
\end{array}$
-In Table 55a, if the trading price of goods is based on labor input, what is the relative price of 1 pound of cheese in Mexico?

Question

$\text { Table } 55 \text { a }$
$\begin{array}{l}
\text { Units of output produced by } 1 \text { hour of labor input }\
\begin{array}{|l|l|l|}
\hline \text { Commodity } & \text { Canada } & \text { Mexico } \
\hline \text { Bread } & 6 \text { loaves } & 2 \text { loaves } \
\hline \text { Cheese } & 8 \text { punds } & 4 \text { pounds } \
\hline
\end{array}
\end{array}$ 
-In Table 55a, if the trading price of goods is based on labor input, what is the relative price of 1 pound of cheese in Mexico?

Quizplus · Accepted Answer

To find the relative price of 1 pound of cheese in Mexico, we need to compare the amount of labor input required to produce 1 pound of cheese in Mexico to the amount of labor input required to produce 1 loaf of bread in Mexico. From the table, we see that it takes 4 hours of labor input to produce 1 pound of cheese in Mexico, while it only takes 2 hours of labor input to produce 1 loaf of bread in Mexico. Therefore, the relative price of 1 pound of cheese in Mexico is 2 loaves of bread (since it takes twice as much labor input to produce 1 pound of cheese compared to 1 loaf of bread), which is equivalent to choice B.

Table 55 a \text { Table } 55 \text { a } Table 55 a

$\text { Table } 55 \text { a }$