Question
3. In the Foreign country, land is specific to agriculture and capital is specific to manufacturing, while labor is free to move between the two
3. In the Foreign country, land is specific to agriculture and capital is specific to manufacturing, while labor is free to move between the two sectors. Assume that there is no international trade, and that the prices of the manufactured and agricultural goods do not change. Now assume that there is an outward flow of immigrants that decreases the Foreign country's labor force. The following statements describe the change from pre- immigration to post-immigration. 8 points total, 2 points each. (1). Wage increases in the Foreign country (2) The marginal products of labor increases for both industries. (3). The marginal product of land decreases in the Foreign country. (4). The rental rate of capital decreases
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