2. [Specific Factors Model] (20 points) The marginal product of labor curves corresponding to the production functions in problem 1 are as follows: Workers Employed MPL in Sector 1 MPL in Sector 2 10 1.51 1.59 20 1.14 1.05 30 1.00 0.82 40 0.87 0.69 50 0.78 0.60 60 0.74 0.54 70 0.69 0.50 80 0.66 0.46 90 0.63 0.43 100 0.60 0.40 a. (6 points) Suppose the price of good 2 relative to that of good 1 is 2. Determine the wage rate and the allocation of labor between the two sectors. b. (2 points) Given your answer in part a, determine the output of each sector. c. (2 points) What must be true about the slope of the PPF drawn in 1b at the point where the combination of outputs is what you found in 2b? d. (6 points) Suppose the relative price of good 2 falls to 1.3. Determine the new wage rate and the allocation of labor between the two sectors. e. (2 points) Given the new relative price of good 2 (1.3), determine the output of each sector. f. (2 points) How does the change in the relative price of good 2 impact the real income of laborers? Capital owners? Land owners