Question
A country produces two cropspaddy and wheat. Given the price of paddy (Pp) and wheat (Pw), the relationship of labor allocation is shown as MPLp
A country produces two cropspaddy and wheat. Given the price of paddy (Pp) and wheat (Pw), the relationship of labor allocation is shown as MPLp * Pp = MPLw * Pw = w, where MPLp and MPLw are marginal products of labor for the two. If wheat's price increases by 10 percent with no changes in paddy prices, what will happen to labor demand for wheat production, and the market wage rate?
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International Economics
Authors: Dominick Salvatore
12th edition
9781118955727, 1118955765, 1118955722, 978-1118955765
