The supply curve of labor to industry in the Lewis model is horizontal if there is surplus labor in agriculture. This condition persists as long as
A)the marginal product of labor is less than the average product of labor in agriculture.
B)the marginal product of labor in agriculture is less than the marginal product of labor in industry.
C)there are diminishing returns to labor in agriculture.
D) the marginal product of labor in agriculture is zero.

Question

Quizplus · Accepted Answer

In the Lewis model, the supply curve of labor to industry is horizontal when there is surplus labor in agriculture, which occurs when the marginal product of labor in agriculture is zero. This means additional workers can be moved to industry without affecting agricultural output.

The Supply Curve of Labor to Industry in the Lewis