Answer:
cloth production increase is 16 units
wine production increase is 8 units
Step-by-step explanation:
Given data
Argentina produce cloth = 20 units
Argentina produce wine = 2 units
chile produce cloth = 24 units
chile produce wine = 12 units
to find out
increase in combined output
solution
we know according to question Argentina transfers 2 units of labor from wine to cloth and Chile transfers 1 unit of labor from cloth to wine
therefore cloth production increase = Argentina produced total cloth - before transfer chile produce cloth ...........1
we can say that Argentina produced total cloth is 2 × 20 = 40 units
so from equation 1
cloth production increase = 40 - 24 = 16 units
cloth production increase is 16 units
and we now can say wine production increase = chile produce wine - before transfer Argentina produce wine .............2
so Chile produced total wine is 1 × 12 = 12 units
and Argentina produce wine with 2 units of labor (2 × 2) = 4
so from equation 2
wine production increase = 12 - 4 = 8 units
wine production increase is 8 units
