2. Suppose that at current factor prices cloth is produced using 20 hours of labor for each aore of land, and food is produced using only 5 hours of labor per acre of land.

a. Suppose that the economy's total resources are 600 hours of labor and 60 acres of land. Using a diagram determine the allocation of resources.

b. Now suppose that the labor supply increases first to 800, then 1000, then 1200 hours. Using a diagram like Figure 4-6, trace out the changing allocation of resources.

c. What would happen if the labor supply were to increase even further?