Figure 4A-3 shows land and labor inputs into both cloth and food production. In previous figures we have shown the inputs required to produce one unit of a good. In this figure, however, we show the inputs required to produce one dollar's worth of each good. (Actually, any dollar amount will do, as long as it is the same for both goods.) Thus the isoquant for cloth, CC shows the possible input combinations for producing 1/P units of cloth; the isoquant for food, FF shows the possible combinations for producing 11PF units of food. Notice that as drawn, food production is land-intensive: For any given wr food production will always use a higher land-labor ratio than cloth production. If the economy produces both goods, then it must be the case that the cost of producing one dollar's worth of each good is, in fact, one dollar. In particular, the cost of producing one dollar's worth of both goods must be the same. This outcome is only possible, however, if the minimum-cost point of production for both goods lie on the same isocost line. Thus the wage-rental ratio wlr must be the slope of the line shown, which is just tangent to both isoquants. Finally, now, consider the effects of a rise in the price of cloth on the wage-rental ratio. the price of cloth ries, it is necessary to produce fewer yards of cloth in order to have one