Suppose Country A, a labor-abundant country, produces only wheat and cloth. The following equations illustrate the prices and costs of wheat and cloth in the country. The numbers indicate the amounts of labor and land needed to produce a unit of wheat and cloth. 'W' is the wage rate and 'r' is the rental rate of land.Price of wheat = 1w + 2rPrice of cloth = 2w + 1rIf the initial prices of wheat and cloth are $3 per unit, the labor cost per unit of wheat output is ________ and the rental cost per unit of wheat output is
A. $1; $2.
B. $2; $1.
C. $2; $3.
D. $3; $2.
Answer: A
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