Question
Suppose that -Malaysia requires 1hour of labor to produce a pound of rice and 2 hours of labor to produce a pencil -Indonesia requires 2hours
Suppose that
-Malaysia requires 1hour of labor to produce a pound of rice and 2 hours of labor to produce a pencil
-Indonesia requires 2hours of labor to produce a pound of rice and 3 hours of labor to produce a pencil
Each country has 10000hours of labor to allocate between the production of rice and pencils; and
In autarky malysia consumes 5000 pounds of rice and 2500 pencils
1)In malysia what are the marginal productivities of labor in rice and pencil production
2)In Indonesia what are the marginal productivities of labor in rice and pencil production
3)What are the autarkic prices of rice and pencils in each country?
4)In which product will each specialize?
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