Macroeconomics
Macroeconomics
21st Edition
ISBN: 9781259915673
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Chapter 6, Problem 5P
To determine

Output and employment.

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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
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