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(10 points) Using a carefully drawn 2X2X2 HO diagram with Leontief production, demonstrate the effect of an increase in the price of a capital-intensive good

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(10 points) Using a carefully drawn 2X2X2 HO diagram with Leontief production, demonstrate the effect of an increase in the price of a capital-intensive good on the relative return to labor. In constructing your diagram, feel free to make use of the gures I have constructed in my powerpoint slides by copying and pasting them into this document, and then manipulating the curves and lines as needed. Supplement your answer with a one or two sentence explanation in plain English of the intuition behind the relationship you demonstrate. (5 points) Amend your diagram from the last question to demonstrate that the wage changes are \"amplified\" with respect to the price change. Supplement your answer with a one or two sentence explanation in plain English of the intuition behind this amplification. (10 points) Consider the same relative price movement as in problem 3. Using a new, carefully drawn diagram that employs neoclassical rather than Leontief production, show how the relative intensities with which the two industries are produced would change. Supplement your answer with a one or two sentence explanation in plain English of the intuition behind these changes in intensity

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