Essay
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 rentals on land and capital?
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