Essay
Suppose that land is specific to agriculture, capital is
specific to manufacturing, and labor is mobile between
sectors.If there is an increase in the amount of capital,
holding the prices of agricultural and manufacturing
goods constant, what happens to the wage rate? What
happens to the rental rate of capital? What happens to
the rental rate of land?
Correct Answer:
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The increase in capital increases the ma...View Answer
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Correct Answer:
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