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22. An economy produces two goods ( X and Y) with two factors of production ( K and L, where X is labour-intensive and Y
22. An economy produces two goods ( X and Y) with two factors of production ( K and L, where X is labour-intensive and Y is capital-intensive good. If the factor intensities of production of the goods are different at any factor price range and are nonreversible, then under the assumption of constant returns to scale, an increase in the supply of labour at constant commodity prices will lead to A. An increase in the production of X and a decrease in the production of Y B. An increase in the production of Y but decrease in the production of X C. An equi-proportionate increase in the production of both X and Y D. An increase in the production of both X and Y, but proportionally more in X
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