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Suppose That Due to a Severe Drought in Texas, 100,000

Question 258

Multiple Choice

Suppose that due to a severe drought in Texas, 100,000 farmers relocate from Texas to Louisiana. Assuming that land and labor are complements in a farming production function, what would happen to the wages earned by workers and the rents earned by landowners in Louisiana?


A) Both wages and rents would increase.
B) Both wages and rents would decrease.
C) Wages would increase, and rents would decrease.
D) Wages would decrease, and rents would increase.

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