Consider a Two-Country, Two-Commodity Model A)increase; 0

question 37

Multiple Choice

Consider a two-country, two-commodity model. The table given below shows the units of good X and good Y produced in country A and country B per labor hour. If country B transfers 1 labor hour from the production of good X to the production of good Y, total world production of good Y will _____ by _____ units. $$\begin{array} { | c | c | c | } \hline \text { Productivity } & \text { Country A } & \text { Courntry B } \\\hline \text { Good X } & 1.00 & 0.50 \\\hline \text { Good Y } & 0.20 & 0.70 \\\hline\end{array}$$

• A)increase; 0.7
• B)decrease; 1
• C)decrease; 1.5
• D)increase; 0.5