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The table below shows the bushels of wheat and the bottles of beer that North and South Dakota can produce per day of labor under
The table below shows the bushels of wheat and the bottles of beer that North and South Dakota can produce per day of labor under two different hypothetical situations (Cases I and II).
Case I | Case II | |||
South Dakota | North Dakota | South Dakota | North Dakota | |
Wheat (bushels) | 4 | 1 | 3 | 1 |
Beer (bottles) | 1 | 2 | 4 | 2 |
What is the relative price of wheat in North Dakota prior to trade in Case II?
1 bushel of wheat = 2 bottles of beer
bushel of wheat = 2 bottles of beer
1 bushel of wheat = bottle of beer
2 bushels of wheat = bottle of beer
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