Question
2 SF MODEL: Using the model in 1 (attached). a) What happens to real returns to labour, owners of capital, and owners of land if
2 SF MODEL: Using the model in 1 (attached).
a) What happens to real returns to labour, owners of capital, and owners of land if the price of MANU rises by 10%. Will real wages rise? Will owners of capital be better off? Owners of Land? Show and explain.
b) What happens to real returns to labour, owners of capital, and owners of land if the productivity in MANU rises by 10%? Will real wages rise? Will owners of capital be better off? Owners of Land? Show and explain.
c) What happens to real returns to labour, owners of capital, and owners of land if the quantity of land used in MANU rises by 10%? Will real wages rise? Will owners of capital be better off? Owners of Land? Show and explain.
d) What happens to real returns to labour, owners of capital, and owners of land if the price of AG rises by 10% and the price of MANU rises by 10%. Will real wages rise? Will owners of capital be better off? Owners of Land? Show and explain.
****Please provide detailed graph and explanations! following the model attached!! Thank you!!!
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Rethinking Macroeconomics
Authors: John F McDonald
2nd Edition
1000434699, 9781000434699
