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3. (20%) Consider the specific model as described in the course ppt. The production function of cloth is Qc = K-, and the production function

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3. (20%) Consider the specific model as described in the course ppt. The production function of cloth is Qc = K-, and the production function of food is QF = LOST-5. Labor (L) is the mobile factor, capital (K) is the specific factor of cloth, and land (T) is the specific factor of food. The endowments are K = 64 and T = 100. (A) (10%) Find the marginal product of labor in the cloth industry (as a function of Lc) and that in the food industry (as a function of LF). Is the marginal product of labor decreasing or increasing with labor? (B) (10%) Suppose the prices of cloth and food are pc = 5 and pp = 4. The labor endowment is 10 (L=10). What is the equilibrium allocation of L- and L

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