If instead of the situation given in Problem 6, suppose the price of manufacturing were to fall
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If instead of the situation given in Problem 6, suppose the price of manufacturing were to fall by 20% and the wage declined by 10%. Then would landowners or capital owners be better off? Explain. How would the decrease in the price of manufacturing affect the real wage? Explain.
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Capital owners would be worse off since the decrease in rental on capital 40 is greate...View the full answer
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