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 six units per hour; and the marginal product of labor in the agricultural sector is 10 units per hour. What will happen to the rentals on land and capital?

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The Answer of 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 six units per hour; and the marginal product of labor in the agricultural sector is 10 units per hour. What will happen to the rentals on land and capital?

Suppose That the Wage Is $20 Per Hour in a Two-Sector