Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

2) In the short-run specific-factors model, examine the impact on a small country following a natural disaster that decreases its population. Assume that land is

image text in transcribed
2) In the short-run specific-factors model, examine the impact on a small country following a natural disaster that decreases its population. Assume that land is specific to agriculture, and capital is specific to manufacturing, whereas labor is free to move between the two sectors. a- Please determine the impact of the decrease in the workforce on the output of each industry and the equilibrium wage. Graph and explain, b- What happens to the rentals on capital and land? c- How would your answer to part (a) and (b) change if instead we use the long-run model, with shoes and computers produced using labor and capital? Graph and explain

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Elements Of Chemical Reaction Engineering

Authors: H. Fogler

6th Edition

9780135486221

Students also viewed these Economics questions