In the specific factor model,the effect of an increase in the productivity of labor in the production of food will cause a(an)________ in the quantity of labor used to produce cloth,a(an)________ in the quantity of labor used to produce food and a(an)________ in the wage rate.
A) decrease; increase; increase
B) increase; decrease; increase
C) increase; decrease; decrease
D) decrease; increase; no change
E) increase; increase; no change

Question

Quizplus · Accepted Answer

An increase in labor productivity in food production makes food production more attractive, drawing labor away from cloth production, thus decreasing labor in cloth, increasing labor in food, and increasing the wage rate due to higher productivity.

In the Specific Factor Model,the Effect of an Increase in the Productivity