3. Following table shows the number of labor hours required to produce a digital camera and a
bushel of wheat in US and South Korea. Please answer following questions referring to the
table.
US
South Korea
Total
Digital Camera
100 hours
90 hours
190 hours
Wheat
(bushels)
5 hours
3 hours
8 hours
A). If each country has a total of 9,000 labor hours to devote to the production of the two goods,
please draw the production possibilities frontier for each country. Put "Digital Camera" on
the horizontal axis and "Wheat" on the vertical axis. Be sure to identify the intercept values
on your graphs.
B). Suppose each country allocates 60% its labor hours to wheat production and 40% to the
production of digital cameras. Complete the table like the one above to show each country's
output of the two products.
C). c.
If the two countries do not trade and consume whatever they produce, identify the
current
production and consumption point for each country on their respective
production possibilities frontiers. Label US's consumption point “C” and South Korea's
consumption point, "K".