You are given the following cost data for France, where they have nothing but capital and...

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You are given the following cost data for France, where they have nothing but capital and labor and make nothing but bread and wine. (20) a. capital input labor input total cost To make a loaf of bread 5 francs 4 francs 9 francs To make a bottle of wine 20 francs 10 francs 30 francs Is bread-making more capital-intensive than wine-making or vice versa? Explain. (6) b. Suppose trade opens and the price of wine rises while the price of bread falls. If capital and labor were completely immobile between bread-making and wine-making, who in France would gain from the shift in prices? Who would lose? (Consider the four groups of bread capitalists, bread laborers, wine capitalists, and wine laborers.) (7) c. Which group of consumers will rejoice with the winemakers in the situation presented in Question b? Which group of consumers will commiserate with the breadmakers? (7) You are given the following cost data for France, where they have nothing but capital and labor and make nothing but bread and wine. (20) a. capital input labor input total cost To make a loaf of bread 5 francs 4 francs 9 francs To make a bottle of wine 20 francs 10 francs 30 francs Is bread-making more capital-intensive than wine-making or vice versa? Explain. (6) b. Suppose trade opens and the price of wine rises while the price of bread falls. If capital and labor were completely immobile between bread-making and wine-making, who in France would gain from the shift in prices? Who would lose? (Consider the four groups of bread capitalists, bread laborers, wine capitalists, and wine laborers.) (7) c. Which group of consumers will rejoice with the winemakers in the situation presented in Question b? Which group of consumers will commiserate with the breadmakers? (7)

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a Breadmaking is more capitalintensive than winemaking This is because it requires more francs of ca... View the full answer