Country A has 1,500 units of labor and can produce two goods, manufactures and food. A’s producers take 5 units of labor to produce one unit of manufactures and 6 units to produce one unit of food. Country B has 1800 units of labor and takes 3 units of labor to produce one unit of manufactures and 9 units to produce one unit of food. Draw the production possibility frontiers for the two countries. Draw the world relative supply curve for manufactures. Would trade take place in between A and B in Adam Smith’s world? What good would A export? Suppose at current factor prices a country’s manufactures use 60 hours of labor for each acre of land and food is produced using only fifteen hours of labor per acre of land. If the economy’s total resources are 1800 hours of labor and 180 acres of land, how much labor and land are allocated to manufacture and food production respectively? If the labor supply grows 50%, what happens to the allocation?