You Are Given the Following Classical-Type Table Showing the Output

question 24

Multiple Choice

You are given the following Classical-type table showing the output of 10 days labor in the production of each of the two commodities in each of the two countries. Assume that The U.K. worker's wage is £30 per day and that the fixed exchange rate is $2 = £1.
$\begin{array}{lll}&\underline{\text { Food }}&\underline{\text { Clothing }}\\\\\text { United States } & 30 \text { units } & 30 \text { units } \\\text { United Kingdom } & 20 \text { units } & 15 \text { units }\end{array}$

If trade is taking place between the two countries, what is the "upper limit" to the U.S.Worker's wage per day?

• A) $30
• B) $40
• C) $90
• D) $120

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Definitions:

Resource Demand Curve

A graph showing the relationship between the price of a resource and the quantity of that resource demanded by firms.

Imperfectly Competitive

A market structure where the conditions for perfect competition are not fully met, including monopolistic competition and oligopoly.

Purely Competitive

A market scenario where there are many buyers and sellers, each has no influence over the price of products, leading to perfect competition.

Marginal Resource Cost

The additional cost incurred by producing one more unit of a product or service, especially in terms of the resources used in its production.