In the two-sector (manufacturing and agriculture) specific-factors model, it is assumed that labor:
A) can move freely between the manufacturing and agricultural sectors.
B) can move from the manufacturing to the agriculture sector, but not from the agricultural to the manufacturing sector.
C) cannot move from one sector to the other.
D) cannot move within a sector.

Question

Quizplus · Accepted Answer

In the specific-factors model, labor is assumed to be mobile between sectors, allowing it to move freely from manufacturing to agriculture and vice versa, while other factors like land and capital are specific to each sector.

In the Two-Sector (Manufacturing and Agriculture) Specific-Factors Model, It Is