In the short-run specific-factors model, consider a decrease in the stock of land. For example, suppose a natural disaster decreases the quantity of arable land used for planting crops. a. Demonstrate a change in the supply of land on the accompanying diagram. b. New equilibrium wage:
In the short-run specific-factors model, consider a decrease in the stock of land. For example, suppose a natural disaster decreases the quantity of arable land used for planting crops. a. Demonstrate a change in the supply of land on the accompanying diagram. b. New equilibrium wage:
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
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![Movement of Labor and Capital Between Countries
In the short-run specific-factors model, consider a decrease in
the stock of land. For example, suppose a natural disaster
decreases the quantity of arable land used for planting crops.
a. Demonstrate a change in the supply of land on the
accompanying diagram.
b. New equilibrium wage:
c. New quantity of agricultural labor:
d. The rental on capital will
decrease
increase
remain the same
Wage
20
19
18
17
16
15
14
13
12
11
10
9
8
7
0
5
4
3
2
1
0
P MPL
A A
MPL
01234 678 10 11 12 13 14 15 16 17 18 19 20
Labor](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F140ca7f5-8fe8-44b6-9d8c-6fd12a20ba54%2F9a9d47a6-5742-48a2-afe9-6076fa95f6ba%2Fmeukjq_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Movement of Labor and Capital Between Countries
In the short-run specific-factors model, consider a decrease in
the stock of land. For example, suppose a natural disaster
decreases the quantity of arable land used for planting crops.
a. Demonstrate a change in the supply of land on the
accompanying diagram.
b. New equilibrium wage:
c. New quantity of agricultural labor:
d. The rental on capital will
decrease
increase
remain the same
Wage
20
19
18
17
16
15
14
13
12
11
10
9
8
7
0
5
4
3
2
1
0
P MPL
A A
MPL
01234 678 10 11 12 13 14 15 16 17 18 19 20
Labor
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