In a two-sector (manufacturing and agriculture) specific-factors model:
A) land is specific to the manufacturing sector.
B) labor is specific to the manufacturing sector.
C) capital is specific to the manufacturing sector.
D) labor and capital are specific to the manufacturing sector.

Question

Quizplus · Accepted Answer

In a two-sector specific-factors model, certain factors of production are specific to each sector. Typically, land is specific to agriculture, and capital is specific to manufacturing, while labor is mobile and can work in either sector.

In a Two-Sector (Manufacturing and Agriculture) Specific-Factors Model