Use the information for Case B in Table 2.5 and assume that labor is the only factor of production and is homogeneous (i.e., all of one type).

(a) What is the cost in terms of labor content of producing wheat and cloth in the United States and the United Kingdom?

(b) What is the dollar price of wheat and cloth in the United States if the wage rate is $6?

(c) What is the pound price of wheat and cloth in the United Kingdom if the wage rate is £1?

Table 2.5

Production Possibilities in the United States and the United Kingdom

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Case A Case B Case C Case D U.S U.K U.S U.K U.S U.K U.S U.K Wheat (bushels/hour) Cloth (yards/hour) 4