1. In the United States where land is cheap , the ratio of land to labor used in cattle raising is higher than that used in wheat growing .However ,in more crowded countries ,where land is expensive and labor is cheap ,it is common to employ a lower land to labor ratio to raise cows than the land to labor ratio for Americans to grow wheat. Suppose the technologies of raising cows and growing wheat are the same across all countries .Tbat is, the same quanties of inputs yield the same quantity of output in all countries . In other words , for the same wage to land rent ratio , the land to labor ratio is the same in each sector for all countries . Can we still say that raising cattle is land intensive compared with farming wheat in all countries '? Why or whg.r not? 2. Suppose a country produces two goods :wine and cloth . Suppose that each cask of wine always requires 4 labor units and lcapital unit in its production and each bolt of cloth requires 2 and 5 units respectively of labor and capital .This is regardless of the factor prices . (a)lf wage and rental rate of capital each equal l,what are the costs of wine and cloth ?' {b} Suppose wage and rental rate of capital are both 110 , what are the new costs of wine and cloth ? (c) Suppose wage is 120 and rental rate of capital is 105 , what are the new costs of wine and cloth ? {d} Suppose wage is 90 and rental rate of capital is 120 , what are the new costs of wine and cloth ? (e) Under perfect competition the unit cost of production must be equal to price. Therefore , the costs in parts (a) to [d] must be the same as prices . Plot ow P: against wfr as in the left panel of Figure 57 of Chapter 5, using the numbers you get from [a)-{d) above . Also , on the right side of the diagram ,plot CC and W (the Kr'L ratio of cloth and wine respectively )as in the right panel of Figure 5-? of Ch 5. Please indicate the coordinates of all relevant points . 3. Refer to the data in the last question .Portugal and England both have the same technology described above .England has 100 workers and 160 capital units , and Portugal has 100 workers and 3'0 capital units . (a) Calculate the outputs of wine and cloth in the two countries assuming that both labor and capital are i'ullj,r utilized . [b] Does the following theorem hold: "An increase in the supply of a factor leads to an increase in the output of the good that makes intensive use of it, but a decrease in