Given the following Ricardo-type table showing the amount of labor input required to produce one unit of output of each of the two goods in each of the two countries:
$\begin{array}{lll}
&\underline{\text { Shirts }}&\underline{\text { Machines }}\
\text { France } & 3 \text { days } & 5 \text { days } \
\text { Germany } & 2 \text { days } & 4 \text { days }
\end{array}$

If the wage rate in France is €60 per day (i.e., 60 euros per day), what is the upper limit to the wage rate per day in Germany (which also uses the euro) that is compatible with two-way trade between the countries?
A) €40
B) €48
C) €75
D) €90

Question

Given the following Ricardo-type table showing the amount of labor input required to produce one unit of output of each of the two goods in each of the two countries:
$\begin{array}{lll}
&\underline{\text { Shirts }}&\underline{\text { Machines }}\
\text { France } & 3 \text { days } & 5 \text { days } \
\text { Germany } & 2 \text { days } & 4 \text { days }
\end{array}$

If the wage rate in France is €60 per day (i.e., 60 euros per day), what is the upper limit to the wage rate per day in Germany (which also uses the euro) that is compatible with two-way trade between the countries?
A) €40
B) €48
C) €75
D) €90

Quizplus · Accepted Answer

The Answer of Given the following Ricardo-type table showing the amount of labor input required to produce one unit of output of each of the two goods in each of the two countries:
$\begin{array}{lll}
&\underline{\text { Shirts }}&\underline{\text { Machines }}\
\text { France } & 3 \text { days } & 5 \text { days } \
\text { Germany } & 2 \text { days } & 4 \text { days }
\end{array}$

If the wage rate in France is €60 per day (i.e., 60 euros per day), what is the upper limit to the wage rate per day in Germany (which also uses the euro) that is compatible with two-way trade between the countries?
A) €40
B) €48
C) €75
D) €90

Given the Following Ricardo-Type Table Showing the Amount of Labor