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Suppose That Due to Flooding in Louisiana,100,000 Farmers Relocate from Louisiana

Question 392

Multiple Choice

Suppose that due to flooding in Louisiana,100,000 farmers relocate from Louisiana to Texas.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 Texas?


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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