The table below shows the bushels of wheat and the bottles of beer that North and South Dakota can produce per day of labor under two different hypothetical situations (Cases I and II). $$\begin{array} { | l | c | c | c | c | }
\hline & { \text { Case I } } & &{ \text { Case II } } \
\hline & \text { South Dakota } & \text { North Dakota } & \text { South Dakota } & \text { North Dakota } \
\hline \text { Wheat (bushels) } & 4 & 1 & 3 & 1 \
\hline \text { Beer bottles) } & 1 & 2 & 4 & 2 \
\hline
\end{array}$$ What is the relative price of wheat in North Dakota prior to trade in Case II?
A)2 bushels of wheat = ½ bottle of beer
B)½ bushel of wheat = 2 bottles of beer
C)1 bushel of wheat = ½ bottle of beer
D)1 bushel of wheat = 2 bottles of beer

Question

The table below shows the bushels of wheat and the bottles of beer that North and South Dakota can produce per day of labor under two different hypothetical situations (Cases I and II). $$\begin{array} { | l | c | c | c | c | } 
\hline &  { \text { Case I } } & &{ \text { Case II } } \
\hline & \text { South Dakota } & \text { North Dakota } & \text { South Dakota } & \text { North Dakota } \
\hline \text { Wheat (bushels) } & 4 & 1 & 3 & 1 \
\hline \text { Beer bottles) } & 1 & 2 & 4 & 2 \
\hline
\end{array}$$ What is the relative price of wheat in North Dakota prior to trade in Case II?
A)2 bushels of wheat = ½ bottle of beer
B)½ bushel of wheat = 2 bottles of beer
C)1 bushel of wheat = ½ bottle of beer
D)1 bushel of wheat = 2 bottles of beer

Quizplus · Accepted Answer

In Case II, North Dakota can produce 1 bushel of wheat or 2 bottles of beer per day. Therefore, the opportunity cost of producing 1 bushel of wheat is 2 bottles of beer, making the relative price 1 bushel of wheat = 2 bottles of beer.

The Table Below Shows the Bushels of Wheat and the Bottles