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Suppose Malaysia's production possibilities include a maximum of 120 units of rice or 300 units of lumber, and Canada's production possibilities include a maximum
Suppose Malaysia's production possibilities include a maximum of 120 units of rice or 300 units of lumber, and Canada's production possibilities include a maximum of 240 units of rice or 180 units of lumber. Then suppose each country initially allocates 50% of its labor to producing each product. a) Total production by the two countries equals 180 tons of rice and 240 ft of lumber. b) Now suppose that Malaysia increases the labor it allocates to lumber by 10%. Its lumber production rises by production falls by and its rice c) If Canada reallocates its labor to increase its rice production by exactly the amount that Malaysia's rice production fell, by how much must its lumber production fall? ft d) State the combined effects on total production of the reallocations in part b and c. Total production of rice changes by tons. (include a negative sign, if needed) Total production of lumber changes by ft3. (include a negative sign, if needed)
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