Suppose that the wage is $20 per hour in a two-sector (manufacturing and agriculture) specific-factors 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. The value marginal product of labor is hence higher in one sector, so this cannot be an equilibrium. What will happen to the distribution of labor between the two sectors?
Answers (1)
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Suppose that the wage is $20 per hour in a two-sector (manufacturing and agriculture) specific-factors model. Currently, the prices of ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
Sam and Sandy have an agreement whereby Sam will build a house on Sandy's beachfront lot. Before construction begins, Sandy changes her mind and decides she would rather build an addition onto her home in Baltimore.
Answers (1)
Rossiter Restaurants is analyzing a project that requires $180,000 of fixed assets. When the project ends, those assets are expected to have an aftertax salvage value of $45,000. How is this salvage value handled when computing NPV of the project?
Answers (1)
Milden Company is a merchandiser that plans to sell 12,000 units during the next quarter at a selling price of $100 per unit.
Answers (1)
In a general equilibrium Answer: A. supply equals demand for all goods and markets only in the persent time as we don't know what happens in the future. B. prices are exogenous because the wage rate is fixed by unions. C.
Answers (1)
What elements must be present for fire to exist?
Answers (2)
New Questions in Business
The house that Jeanne inherited from her mother can rent for $1500/month, but Jeanne decides to allow her brother to stay there for only $500 per month.
Answers (1)
Our most rapid and automatic emotional responses may result from the routing of sensory input through the thalamus directly to the
Answers (1)
This diploma program is a rigorous pre-university course of study that culminates in internationally standardized tests.
Answers (1)
To establish res ipsa loquitur in most states, the plaintiff must demonstrate all but which of the following?
Answers (1)
What is the name of the government program that provides cash benefits to senior citizens?
Answers (1)