Assume a specific factors economy produces two goods, cloth and food, and that wher food is on the y-axis. When the price of cloth increases by 6% and the price of food does not change, A. labor shifts from the cloth sector to the food sector. B. the real wage rates are unaffected. C. the marginal product of labor in the cloth sector falls. D. the marginal product of labor in the cloth sector rises.

Assume a specific factors economy produces two goods, cloth and food, and that wher food is on the y-axis. When the price of cloth increases by 6% and the price of food does not change, A. labor shifts from the cloth sector to the food sector. B. the real wage rates are unaffected. C. the marginal product of labor in the cloth sector falls. D. the marginal product of labor in the cloth sector rises.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter1: Welcome To Economics!

Section: Chapter Questions

Problem 10RQ: Give the three reasons that explain why the division of labor increases an economys level of...

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