Suppose That the Wage Is $20 Per Hour in a Two­sector

Multiple Choice

Suppose that the wage is $20 per hour in a two­sector
(manufacturing and agriculture) specific­factors model.
Currently, the prices of manufactured and agricultural
Outputs are $5 and $1, respectively; the marginal
Product of labor in the manufactured sector is 6 units
Per hour; and the marginal product of labor in the
Agricultural sector is 10 units per hour.What will happen
To the distribution of labor between the two sectors?

A) Nothing will happen.The current allocation of labor between the two sectors is ideal.
B) The manufacturing sector will demand more labor, and the agricultural sector will demand less labor at the
Current wage.
C) The agricultural sector will demand more labor, and the manufacturing sector will demand less labor at the
Current wage.
D) Both the agricultural and the manufacturing sector will demand more labor at the current wage.