The text presents an economic problem involving the United States and France, each possessing 100 hours of labor for producing cheese and bread. The production capabilities per labor hour are as follows:- The US can produce either 100 loaves of bread or 1 wheel of cheese.- France can produce either 400 loaves of bread or 2 wheels of cheese.The problem asks for the maximum amount of cheese that can be produced if the countries decide to jointly produce 45,000 loaves of bread. The available options for the maximum cheese production are:- 50 wheels- 0 wheels- 100 wheels- 25 wheelsNote: Answering this problem involves using concepts of opportunity cost and production possibilities to find an optimal labor allocation.

In this example France has the absolute advantages in producing both goods . Detailed solution are…

The US and France each have 100 hours of labor to allocate between producing cheese and bread. With 1 labor hour, the US can produce either 100 loaves of bread, or 1 wheel of cheese. With 1 labor hour, France can produce either 400 loaves of bread, or 2 wheels of cheese. Suppose the countries jointly decide to produce a combined amount of 45000 loaves of bread. What is the maximum amount of cheese they can jointly produce? 50 wheels O wheels 100 wheels 25 wheels

The US and France each have 100 hours of labor to allocate between producing cheese and bread. With 1 labor hour, the US can produce either 100 loaves of bread, or 1 wheel of cheese. With 1 labor hour, France can produce either 400 loaves of bread, or 2 wheels of cheese. Suppose the countries jointly decide to produce a combined amount of 45000 loaves of bread. What is the maximum amount of cheese they can jointly produce? 50 wheels O wheels 100 wheels 25 wheels

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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