The Table Given Below Shows the Number of Labor Hours

question 45

Multiple Choice

The table given below shows the number of labor hours required to produce 1 umbrella and 1 bushel of corn in the U.K. and the Rest of the World. If the U.K. and the Rest of the World begin to trade with each other, the international price of corn will lie between _____ and _____. $$\begin{array} { | c | c | c | } \hline \text { Labor hours to make: } & \text { In the Urited Kingdorn } & \text { In the Rest of the World } \\\hline \text { l umbrella } & 3.00 & 2.00 \\\hline \text { 1 bushel of corn} & 1.00 & 0.25 \\\hline\end{array}$$

• A)1/3 of an umbrella per bushel of corn; 3 umbrellas per bushel of corn
• B)3 umbrellas per bushel of corn; 8 umbrellas per bushel of corn
• C)1/8 of an umbrella per bushel of corn; 1/3 of an umbrella per bushel of corn
• D)1/8 of an umbrella per bushel of corn; 8 umbrellas per bushel of corn

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Definitions:

Simple Interest

The method of calculating interest charges based on the principal amount only, not compounding on accumulated interest.

Deposit

A sum of money placed into a bank account or given as security for a contractual obligation.

Ordinary Annuities

Fixed payments received or paid out over a designated series of periods where the payments occur at the end of each period.

Annuities Due

An annuity for which payments are made at the beginning of each period, rather than at the end.