With Constant Labor Costs (L), the Two Countries, X and Y

question 36

Multiple Choice

With constant labor costs (L) , the two countries, X and Y produce units of A and B as shown below.It is clear that with free trade, money wage rates in X will be:

• A)3 times those in Y.
• B)more than 3 times those in Y.
• C)between 2 and 3 times those in Y.
• D)less than twice those in Y but how much less is unknown.
• E)one-fourth those in Y.

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