Suppose That the Labor Requirements Per Unit of Output in Each

question 14

Multiple Choice

Suppose that the labor requirements per unit of output in each of the two industries in Each of three countries are as follows:
$\begin{array} { l l l } & \underline{\text { Wheat }} & \underline{\text { Cloth} } \\\\\text { Spain } & \text { 2 days } & \text { 3 days } \\\text { France } & \text { 2 days } & \text { 2 days } \\\text { United States } & \text { 1 day } & \text { 3 days }\end{array}$
In this situation, with an international terms of trade of 1 cloth:2 wheat (or 1 wheat:½ cloth) , __________ would export cloth and import wheat; if the terms of trade were, instead, 1 wheat:¾ cloth (or 1 cloth:1 wheat) , __________ would export cloth and import wheat.

• A) France and the United States; Spain
• B) Spain and France; France
• C) France and the United States; Spain and the United States
• D) Spain and France; Spain and the United States

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