(1) Suppose Home has 2,000 units of labor available. It can produce two goods, clothing (C) and wheat (W). The unit labor requirement in clothing production is 5, while in wheat production it is 2.

a. Let QC and QF be the quantities of clothing and wheat produced, derive Home's production possibility frontier (PPF) and graph it.

b. What is the opportunity cost of clothing in terms of wheat?

c. What and how much does Home produce when the relative price of clothing is 3, i.e., pC/pF = 3?

d. Which workers (clothing workers or wheat workers) earn higher wages when the relative price of clothing is 2.5, i.e., pC/pF = 2.5?